factual

In addition to Holdover Rental, what other financial obligations might an Aplus franchisee incur for holding over after the lease expires?

Aplus Franchise · 2024 FDD

Answer from 2024 FDD Document

days prior written notice of termination.

1.31 Sunoco's Other Remedies

Upon Termination or Expiration of Lease

  • (A) In addition to the rights of termination prescribed in Section 2.20, Sunoco shall have the following remedies. All such remedies are cumulative, concurrent, and in addition to any other remedies Sunoco may have at law or in equity or pursuant to this Lease. The election of any remedies by Sunoco shall not preclude Sunoco from pursuing any other remedies.
    • (1) If Sunoco initiates judicial proceedings to recover possession of the Premises after termination or expiration of this Lease and recovers judgment for possession, you shall pay Sunoco its reasonable attorneys' fees incurred in connection with those proceedings.

Damages for Holding Over

  • (2) If you remain in possession of the Premises beyond the Lease Term hereof for whatever reason, then Sunoco may elect to treat you as a tenant-at-will, with the further right to terminate such tenancy upon thirty (30) days' prior written notice to you. You shall be obligated to pay to Sunoco a Holdover Rental for such tenancy equal to one hundred fifty percent one hundred fifty percent (150%) of the Rent for each month or part thereof of such tenancy at will ("Holdover Rental"). The monthly Holdover Rental shall be calculated by using an average of the prior three (3) months total Rent due Sunoco multiplied by one hundred fifty percent (150%). Acceptance by Sunoco of Holdover Rental for any month shall not be construed as a waiver of Sunoco's rights to evict you at any time after the termination of this Lease. Nor shall such acceptance of Holdover Rental by Sunoco be treated or construed as an expressed or implied renewal or continuation of this Lease. No action by a representative of Sunoco, such as a promise or representation made orally or by correspondence, shall be treated or construed as an agreement to renew or continue this Lease, and you are not entitled to rely upon any such action, promise, or representation in that respect.
  • (3) Either sum set forth in (1) or (2) above shall be payable in addition to any other special damages caused directly or indirectly by your holding over after the expiration or termination of this Lease. Sunoco's acceptance of either sum shall in no way affect Sunoco's right to immediate possession of the Premises and Loaned Equipment and shall not afford you any right of possession beyond the date of termination or expiration of this Lease.

Source: Item 23 — RECEIPT (FDD pages 68–302)

What This Means (2024 FDD)

According to Aplus's 2024 Franchise Disclosure Document, if a franchisee remains in possession of the premises after the lease term expires, they may incur additional financial obligations beyond the Holdover Rental. Sunoco, the lessor, can elect to treat the franchisee as a tenant-at-will, terminable with a 30-day written notice. The Holdover Rental is set at 150% of the regular rent, calculated as an average of the prior three months' total rent.

In addition to Holdover Rental, the franchisee is liable for any special damages caused directly or indirectly by holding over. These damages are payable on top of the Holdover Rental and do not grant any right of possession beyond the original lease termination date. Sunoco's acceptance of Holdover Rental does not waive their right to evict the franchisee or imply any renewal or continuation of the lease.

Furthermore, if the franchisee fails to fulfill their obligations under the lease, including payments, Sunoco has the right to perform those obligations and charge the franchisee for the costs incurred. These costs are considered additional charges, payable within five days of demand. Sunoco can also use the Collateral Security Deposit to cover these costs. Therefore, holding over not only triggers the Holdover Rental but also exposes the franchisee to potential charges for damages, unmet obligations, and related expenses.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.