Under the Aplus development agreement, what right is granted to the franchisee regarding APLUS Stores?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Under the development agreement, we grant you the right to develop and operate a specified number of APLUS Stores at sites in a specified development area. The development area will be identified on Attachment B to the development agreement and may be described in terms of cities, counties, states, or some other designation.
We reserve to ourselves all other rights, including the right to own and operate and to grant others the right to own and operate APLUS Stores outside the development area, regardless of their proximity to the development area, and in "Captive Markets" located within and outside the development area. We also have the right to distribute products and services identified by the Marks, such as pre-packaged products, through alternative channels of distribution including the Internet. We are not required to compensate you if we exercise any of the rights specified above inside your development area.
Source: Item 12 — TERRITORY (FDD page 47)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a development agreement grants a franchisee the right to develop and operate a specified number of Aplus Stores within a defined development area. This area is detailed in Attachment B of the development agreement and can be defined by cities, counties, states, or other designations. However, this right is not exclusive. Aplus retains the right to grant other parties the ability to operate Aplus stores within the same development area.
Specifically, Aplus reserves the right to operate Aplus Stores or allow others to operate them outside the franchisee's development area, regardless of proximity. Aplus also retains the right to operate stores and license the use of its marks and system in "Captive Markets," both inside and outside the development area. Additionally, Aplus can distribute products and services identified by its trademarks through alternative channels, including the Internet, without compensating the franchisee, even if these activities occur within the franchisee's development area.
Prospective Aplus franchisees should be aware that the development agreement does not provide an exclusive territory. This means they may face competition from other franchisees, company-owned outlets, or alternative distribution channels controlled by Aplus, even within their designated development area. Therefore, it is crucial for potential franchisees to carefully consider the competitive landscape and the potential impact of these factors on their business before entering into a development agreement with Aplus.