What is the amount of the Collateral Security Deposit required before opening an Aplus store?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
anchisor approves.
3.3. Minimum Monthly Royalty Fee
If the Royalty Fee paid to Franchisor is less than the respective minimum monthly royalty fee ("Minimum Monthly Royalty Fee") as described in Attachment 1, then Franchisee shall pay to Franchisor the difference between monthly Royalty Fee and the respective Minimum Monthly Royalty Fee, payable at the same time and in the same manner as the Royalty Fee.
3.4. Collateral Security Deposit
Prior to the opening of the Store, you shall deposit with us cash collateral in the amount stated in Attachment 1 ("Collateral Security Deposit"). The Collateral Security Deposit shall be held by Sunoco as one general, continuing, collateral security for the discharge and payment of the whole, or any part of any present, past, or future obligation indebtedness, or liability of you to Sunoco. You agree to enter into any additional financing statements, security agreement, or other documents deemed necessary by Sunoco. Further:
- 3.4.1. You shall pay to Sunoco a Collateral Security Deposit in an amount determined by Sunoco and no less than Ten Thousand Dollars ($10,000) or another amount stated in Attachment 1, which is due and payable prior to the opening of the APLUS Store. Sunoco, at its sole discretion, may, prior to the opening of the store and/or at any time during the contractual period require a larger Collateral Security Deposit, or other additional security, and also require that you execute and deliver additional and updated financing statements, security agreements or other documents.
- 3.4.2. You represent that all money deposited herein, is and/or shall be free and discharged of all third party claims, assignments, trust and legal processes.
- 3.4.3. You shall pay to Sunoco any indebtedness or balance of indebtedness whatsoever which you owe to Sunoco by
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a franchisee must deposit a Collateral Security Deposit prior to opening their store. The minimum amount for this deposit is $10,000, though the exact amount is determined by Sunoco and may be specified in Attachment 1 of the franchise agreement.
The purpose of the Collateral Security Deposit is to act as security for any present, past, or future financial obligations the franchisee may have to Sunoco. This means Sunoco can use the deposit to cover unpaid debts or liabilities. The franchisee also agrees to sign any additional financing statements or security agreements Sunoco deems necessary.
Sunoco retains the right to increase the required Collateral Security Deposit or demand additional security at any point during the contractual period, even before the store opens. The amount of the deposit can also be changed through mutual agreement between Sunoco and the franchisee. It is important for prospective franchisees to understand that the funds used for the deposit must be free of any third-party claims or encumbrances.