Does the Aplus 'Approved Vendor Purchase Requirement' mandate purchases from specific suppliers?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
ing but not limited to Sunoco LLC, a Delaware limited liability company.
- "Agreement" means this agreement entitled "Sunoco Retail LLC Franchise Agreement" and all instruments supplemental hereto or in attachment, amendment, or confirmation hereof.
- "APLUS Store" or "APLUS Franchise" shall mean an APLUS Franchised Business.
- "Approved Supplier(s)" has the meaning given to such term in Section 13.1.
- "Approved Vendor Purchase Requirement" means we may implement a buying group in which your participation will be required. In connection with such buying group, you will be required and you agree to make up to 90% of your total inventory purchases and, separately, up to 90% of your cigarette purchases, both computed monthly at cost, from Approved Suppliers or Designated Specific Suppliers. No purchase will be credited toward your Approved Vendor Purchase Requirement unless the purchase is from an Approved Supplier or Designated Specific Supplier. The cost value used to calculate your percentage of
inventory purchases and cigarette purchases from Approved Suppliers or Designated Specific Suppliers will only include the cost reflected on vendor invoices, and will exclude any allowances, rebates and discounts not reflected on vendor invoices. To count toward your Approved Vendor Purchase Requirement, the products must be ordered and paid for through our recommended method for ordering and paying that vendor.
- "Business Data" has the meaning given to such term in Section 6.8.
- "Captive Market" means venues that service a captive market, including, but not limited to, turnpikes, thruways, toll roads, airports, travel plazas, arenas, convention centers, or military bases, or venues at which food and/or beverage service rights are contracted to a third party.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Aplus may implement a buying group that requires franchisees to purchase a significant portion of their inventory from approved or designated suppliers. The 'Approved Vendor Purchase Requirement' means Aplus franchisees may be required to purchase up to 90% of their total inventory and, separately, up to 90% of their cigarette purchases, calculated monthly at cost, from 'Approved Suppliers' or 'Designated Specific Suppliers'.
This requirement means that a new Aplus franchisee might have limited flexibility in choosing suppliers and negotiating prices. The cost used to calculate the percentage of purchases from approved vendors includes only the cost reflected on vendor invoices, excluding allowances, rebates, and discounts not shown on the invoices. To comply with the 'Approved Vendor Purchase Requirement', products must be ordered and paid for through Aplus's recommended method for each vendor.
While Aplus approves these suppliers, Aplus does not provide any warranties, including merchantability for any particular purpose, regarding the fixtures, furniture, equipment, computer systems, supplies, or other items purchased from these approved vendors. Aplus retains the right to review and revoke its approval of any items or suppliers at any time by notifying the franchisee, who must then cease using or selling any disapproved items or services at their own expense.
This mandate ensures uniformity and potentially leverages bulk purchasing power, but it also means franchisees must adhere to Aplus's approved vendor list and purchasing protocols. Prospective franchisees should evaluate the pricing, quality, and service levels of the approved vendors to ensure they align with their business needs and profitability goals. Understanding the specific terms and conditions of the 'Approved Vendor Purchase Requirement' is crucial for assessing the financial implications and operational constraints of the Aplus franchise.