Under the Aplus franchise agreement, what happens if an approved transfer is not effected within the designated time frame following a death or permanent incapacity?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
enses it incurs (including, without limitation, attorneys' fees and accountants' fees) in connection with reviewing the proposed offering.
- 8.9 Transfer Upon Death or Incapacitation. Upon the death or permanent incapacity (mental or physical) of the Developer or any Owner, the executor, administrator, or personal representative of such person shall transfer such interest to a third party approved by Franchisor within six months after such death or mental incapacity. Such transfers, including, without limitation, transfers by devise or inheritance, shall be subject to the same conditions as an inter vivos transfer, except that the transfer fee shall be waived. In the case of transfer by devise or inheritance, however, if the heirs or beneficiaries of any such person are unable to meet the conditions of this Section 8, the executor, administrator, or personal representative of the decedent shall transfer the decedent's interest to another party approved by Franchisor within six months, which disposition shall be subject to all the terms and conditions for transfer contained in this Agreement. If the interest is not disposed of within such period, Franchisor may, at its option, terminate this Agreement, pursuant to Section 9.5.
- 8.10. Non-Waiver of Claims.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if an approved transfer is not completed within the specified timeframe following the death or permanent incapacity of the developer or owner, Aplus has the right to terminate the franchise agreement.
The FDD specifies that upon the death or permanent incapacity (mental or physical) of the Developer or any Owner, the executor, administrator, or personal representative of such person shall transfer such interest to a third party approved by Aplus within six months after such death or mental incapacity. If the heirs or beneficiaries are unable to meet the conditions of Section 8, the executor, administrator, or personal representative of the decedent shall transfer the decedent's interest to another party approved by Aplus within six months, subject to all transfer terms in the agreement.
If the interest is not disposed of within this six-month period, Aplus may choose to terminate the agreement, as per Section 9.5 of the agreement. This clause underscores the importance of having a succession plan in place and ensuring that heirs or beneficiaries are capable and willing to take over the franchise, or that an alternative approved buyer can be found within the given timeframe. This provision protects Aplus's interests by ensuring the continued operation of the franchise under approved management, even in unforeseen circumstances.