What were the accounts payable to affiliates for Aplus as of December 31, 2023, and what were these payables attributable to?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
ws:
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2021 | ||||
| Motor fuel sales to affiliates | $ 42 | $ | 52 | $ | 25 | |
| Bulk fuel purchases from affiliates | 1,661 | 2,188 | 1,705 |
Significant affiliate balances included on our consolidated balance sheets were as follows:
- Accounts receivable from affiliates were $20 million and $15 million at December 31, 2023 and 2022, respectively, which were primarily related to motor fuel sales to affiliates.
- Accounts payable to affiliates were $170 million and $109 millio
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, as of December 31, 2023, Aplus had accounts payable to affiliates totaling $170 million. This figure is a notable increase from the $109 million reported on December 31, 2022. These payables were primarily attributed to operational expenses and bulk fuel purchases.
For a prospective Aplus franchisee, understanding the nature and magnitude of these affiliate transactions is crucial. The fact that a significant portion of Aplus's payables are to its affiliates suggests a high degree of integration and financial interaction within the Aplus corporate structure. This could impact the franchisee's operations, particularly concerning fuel supply and other operational costs.
It is important for potential franchisees to investigate the terms and conditions of these inter-company transactions. Understanding how these costs are allocated and whether they are competitive compared to market rates is essential for assessing the profitability and financial health of an Aplus franchise. Further due diligence into these related-party transactions would be advisable to ensure transparency and fair dealing.