What aspects of renewal, termination, transfer, and dispute resolution does this section of the Aplus FDD cover?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
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THE FRANCHISE RELATIONSHIP
Development Agreement
| | Provision | Development | Summary | |----|------------------------------------------------------|--------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | Agreement | | | a. | Length of the Agreement term | Section 2.1 | The period beginning on the effective date and ending on the earlier of: (i) the date on which you have completed your development obligations, or (ii) 12:00 midnight CST on the last day specified in the development schedule. | | b. | Renewal or extension of the term | No provision | Not applicable. | | c. | Requirements for Developer to renew or extend | No provision | Not applicable | | d. | Termination by Developer | No provision | Not applicable | | e. | Termination by the franchisor without cause | No provision | Not applicable | | f. | Termination by the franchisor with "cause" | Sections 9.1, 9.2., 9.3, 9.4, 9.5, and 9.6 | We can terminate if you materially default under your development agreement, an individual franchise agreement, or any other agreement between you or your affiliate and us. In the event of the death or permanent incapacity of an owner, we may terminate if you fail to adhere to the applicable transfer requirements. | | g. | "Cause" defined - curable defaults | Sections 9.3, 9.4, 9.5, and 9.6 | You have 10 days to cure a failure to pay fees and 30 days to cure any other default, and in the case of a breach or default in the performance of your obligations under any franchise agreement or other agreement between you and us. | | h. | "Cause" defined – non curable defaults | Sections 9.1 and 9.2 | Non-curable defaults: unapproved transfers; failure to meet development obligation; any breach of confidentiality or unfair competition described in Section 10; cross defaults, bankruptcy, foreclosure, insolvency, conviction of a felony, misrepresentations in your application, and/or repeated defaults, even if cured. | | i. | Developer's obligation on termination/non-renewal | Sections 2.2 and 10.2 | You will have no further right to develop or operate additional APLUS Stores which are not, at the time of termination, the subject of a then existing franchise agreement between you and us. You may continue to own and operate all APLUS Stores under then existing Franchise Agreements. | | j. | Assignment of contract by franchisor | Section 8.1 | No restrictions on our right to assign. | | k. | "Transfer" by Developer – defined | Section 8.2 | Includes transfer of the agreement, changes in ownership of the entity which is a party to the agreement and transfers of assets. No shares of a | Sunoco Retail LLC
| | Provision | Section in Development Agreement | Summary | |----|------------------------------------------------------------------------------|----------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | developer which is a business entity may be offered for sale through the public offering of securities. Shares may be offered by private offering with our prior written consent. | | l. | Franchisor approval of transfer by Developer | Section 8.4 | Transfers require our prior written consent, which may be withheld for any reason, in our sole subjective judgment. However, transfers that do not result in a change of control may, subject to certain conditions described in the development agreement, be completed without our prior written consent. | | m. | Conditions for franchisor approval of transfer | Section 8.4 | You may not transfer any franchise agreement signed under the development agreement, except with our written consent and a simultaneous assignment of the development agreement and all of the franchise agreements signed under the development agreement to the same assignee. You must pay the applicable transfer fee and sign a general release. | | n. | Franchisor's right of first refusal to acquire Developer's business | Not Applicable | Not applicable | | o. | Franchisor's option to purchase Developer's business | Not applicable | Not applicable | | p. | Death or disability of Developer | Section 8.9 | Same requirements as for a transfer in "m" above. If your interest is not transferred within six months following your (or an Owner's) death or legal incapacity, your development agreement may be terminated. | | q. | Non-competition covenants during the term of the Agreement | Not applicable | Not applicable | | r. | Non-competition covenants after the Agreement is terminated or expires | Section 10.2 | In the event you or an affiliate is in default of the Development Agreement which has led to premature termination of the Development Agreement, you and any owner are prohibited from owning an interest in, investing in, managing, operating, or performing services, consulting with, or be employed by or for any competitive business located in the development area or located within 25 miles of any APLUS Store in existence at under development at the time of such termination, for two years after termination of the Development Agreement. Any competitive business owned by you or an affiliate |
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| at the time of early termination of the development agreement due to default is excepted from this restriction. | |||
| s. | Modification of the Development Agreement | Sections 13.1 and 13.2 | Must be in writing and signed by all parties |
| t. | Integration/merger clause | Section 13.1 | Only the terms of the development agreement are binding. |
| u. | Dispute resolution by arbitration or mediation | Not applicable | Not applicable |
| v. | Choice of forum | Sections 14.3 | Venue for any proceeding is the court serving the judicial district in which we maintain our principal place of business at the time the action is initiated (currently Dallas, Texas) (subject to state law). |
| w. | Choice of law | Section 14.1 | Texas law applies without giving effect to any conflict of law principals (subject to state law). |
ITEM 18 PUBLIC FIGURES
We do not use any public figure to promote our franchise.
ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS
The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.
We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representative to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Mallory Raleigh, 8111 Westchester Drive, Suite 600, Dallas, Texas 75225, (214) 840-5270, mallory.raleigh@sunoco.com, the Federal Trade Commission, and the appropriate state regulatory agencies.
ITEM 20 OUTLETS AND FRANCHISEE INFORMATION
Table No. 1 System Outlet Summary
FOR YEARS 2021 TO 2023
| Outlet Type | Year | Outlets at the Start of | Outlets at the End of | |
|---|---|---|---|---|
| the Year | the Year | Net Change | ||
| Franchise | 2021 | 260 | 251 | -9 |
| 2022 | 251 | 250 | -1 | |
| 2023 | 250 | 247 | -3 | |
| Company-Owned | 2021 | 21 | 21 | 0 |
| 2022 | 21 | 21 | 0 | |
| 2023 | 21 | 19 | -2 | |
| Total Outlets | 2022 | 281 | 272 | -9 |
| 2022 | 272 | 271 | -1 | |
| 2023 | 271 | 266 | -5 |
Table No. 2 Transfers to Outlets from Franchisees to New Owners (other than the Franchisor)
FOR YEARS 2021 TO 2023
| State | Year | Number of Transfers | |---|---|---| | CT | 2021 | 1 | | | 2022 | 0 | | | 2023 | 0 | | MA | 2021 | 0 | | | 2022 | 1 | | | 2023 | 2 | | MD | 2021 | 0 | | | 2022 | 1 | | | 2023 | 0 | | NJ | 2021 | 1 | | | 2022 | 1 | | | 2023 | 1 | | NY | 2021 | 0 | | | 2022 | 0 | | | 2023 | 2 | | PA | 2021 | 8 | | | 2022 | 8 | | | 2023 | 6 | | Total | 2021 | 10 | | | 2022 | 11 | | | 2023 | 11 |
Table No. 3 Status of Franchised Outlets
FOR YEARS 2021 TO 2023
| | | | | | | | Ceased | | |---|---|---|---|---|---|---|---|---| | | | Outlets at | Outlets | | Non- | Reacquired | Operations – | Outlets at | | State | Year | Start of Year | Opened | Terminations | Renewals | by Franchisor | Other Reasons | End of Year | | | | | | | | | | | | CT | 2021 | 9 | 0 | 0 | 0 | 0 | 0 | 9 | | | 2022 | 9 | 0 | 0 | 0 | 0 | 0 | 9 | | | 2023 | 9 | 0 | 0 | 0 | 0 | 0 | 9 | | DC | 2021 | 2 | 0 | 0 | 0 | 0 | 0 | 2 | | | 2022 | 2 | 0 | 0 | 0 | 0 | 0 | 2 | | | 2023 | 2 | 0 | 0 | 0 | 0 | 0 | 2 | | DE | 2021 | 8 | 0 | 0 | 0 | 0 | 0 | 8 | | | 2022 | 8 | 0 | 0 | 0 | 0 | 0 | 8 | | | 2023 | 8 | 0 | 0 | 0 | 0 | 0 | 8 | | MA | 2021 | 16 | 0 | 0 | 0 | 0 | 0 | 16 | | | 2022 | 16 | 0 | 0 | 0 | 0 | 0 | 16 | | | 2023 | 16 | 0 | 0 | 0 | 0 | 0 | 16 | | MD | 2021 | 26 | 1 | 2 | 0 | 0 | 0 | 25 | | | 2022 | 25 | 0 | 0 | 0 | 0 | 0 | 25 | | | 2023 | 25 | 0 | 0 | 0 | 0 | 0 | 25 | | NJ | 2021 | 15 | 0 | 0 | 0 | 0 | 2 | 13 | | | 2022 | 13 | 0 | 1 | 0 | 0 | 0 | 12 | | | 2023 | 12 | 0 | 0 | 0 | 0 | 0 | 12 | | NY | 2021 | 54 | 1 | 0 | 2 | 0 | 0 | 53 | | | 2022 | 53 | 0 | 0 | 0 | 0 | 0 | 53 | | | 2023 | 53 | 0 | 1 | 0 | 0 | 0 | 52 | | PA | 2021 | 108 | 1 | 0 | 5 | 0 | 0 | 104 | | | 2022 | 104 | 1 | 2 | 0 | 0 | 0 | 103 | | | 2023 | 103 | 0 | 2 | 0 | 0 | 0 | 101 | | RI | 2021 | 2 | 0 | 0 | 0 | 0 | 0 | 2 | | | 2022 | 2 | 0 | 0 | 0 | 0 | 0 | 2 | | | 2023 | 2 | 0 | 0 | 0 | 0 | 0 | 2 | | VA | 2021 | 20 | 0 | 1 | 0 | 0 | 0 | 19 | | | 2022 | 19 | 1 | 0 | 0 | 0 | 0 | 20 | | | 2023 | 20 | 0 | 0 | 0 | 0 | 0 | 20 | | Totals | 2021 | 260 | 3 | 3 | 7 | 0 | 2 | 251 | | | 2022 | 251 | 2 | 3 | 0 | 0 | 0 | 250 | | | 2023 | 250 | 0 | 3 | 0 | 0 | 0 | 247 |
Table No. 4 Status of Company-Owned Outlets FOR YEARS 2021 TO 2023
| Outlets at | Outlets | Outlets Reacquired | Outlets | Outlets Sold to | Outlets at | ||
|---|---|---|---|---|---|---|---|
| State | Year | ||||||
| Start of Year | Opened | from Franchisees | Closed | Franchisee1 | End of Year | ||
| NJ | 2021 | 21 | 0 | 0 | 0 | 0 | 21 |
| 2022 | 21 | 0 | 0 | 0 | 0 | 21 | |
| 2023 | 21 | 0 | 0 | 2 | 0 | 19 | |
| Totals | 2021 | 21 | 0 | 0 | 0 | 0 | 21 |
| 2022 | 21 | 0 | 0 | 0 | 0 | 21 | |
| 2023 | 21 | 0 | 0 | 2 | 0 | 19 |
Table No. 5 Projected Openings
AS OF DECEMBER 31, 2023
| FRANCHISE | PROJECTED | PROJECTED COMPANY- | ||
|---|---|---|---|---|
| AGREEMENTS SIGNED | FRANCHISED NEW | OWNED OPENINGS IN | ||
| STATE | ||||
| BUT NOT OPEN | STORES IN THE NEXT FISCAL YEAR | THE NEXT FISCAL YEAR | ||
| DE | ||||
| MD | ||||
| MI | ||||
| NY | ||||
| PA | ||||
| VA | ||||
| Totals | A list of the names and current addresses of our franchisees as of December 31, 2023, is located in Exhibit C. A list of names and current addresses of franchisees who have been terminated, canceled, not renewed, voluntarily or involuntarily ceased to do business under their franchise agreement during our fiscal year ending December 31, 2023 or who have not communicated with us within 10 weeks of the issuance date of this disclosure document are also listed in Exhibit C. |
If you buy this franchise, your contact information may be disclosed to other buyers when you leave the franchise system.
In some instances, current or former franchisees sign provisions restricting their ability to speak openly about their experience with APLUS. You may wish to speak with current and former franchisees, but be aware that not all such franchisees will be able to communicate with you.
As of the date of this disclosure document, we have not created, sponsored or endorsed any franchisee
association, and we are not aware of any independent trademark-specific franchisee associations in existence for the system.
ITEM 21 FINANCIAL STATEMENTS
Attached to this disclosure document as Exhibit H are Sunoco LP's Guaranty of Performance and audited consolidated financial statements for the years ended December 31, 2023, 2022, and 2021, as published in Sunoco LP's Annual Report for the Year Ended December 31, 2023.
ITEM 22 CONTRACTS
Attached as Exhibits to this disclosure document are the following contracts and their exhibits:
Exhibit A APLUS Franchise Agreement
Exhibit B Development Agreement
Exhibit F Franchise Disclosure Questionnaire
EXHIBIT A
An as-built site survey in AutoCAD is to be provided by Franchisee. If you do not have an as-built survey in AutoCAD, one will be created by our third party vendor.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 53–64)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Item 17 provides a summary of key provisions in the franchise and related agreements regarding renewal, termination, transfer, and dispute resolution. It specifically references the APLUS Franchise Agreement and the Premises Lease.
The document outlines the length of the agreement term for the Development Agreement, noting it ends when development obligations are met or at a specified date. It indicates that renewal or extension of the term is not applicable for the Development Agreement. Aplus can terminate the Development Agreement if the developer materially defaults or fails to adhere to transfer requirements upon the death or incapacity of an owner.
The FDD details conditions for termination with cause, both curable (failure to pay fees, other defaults with 10-30 day cure periods) and non-curable (unapproved transfers, failure to meet development obligations, breaches of confidentiality, bankruptcy, etc.). It also covers the developer's obligations upon termination, which include no further right to develop additional Aplus Stores not already under a franchise agreement. The document states that Aplus has no restrictions on assigning the contract. Transfer by the developer is defined broadly, including changes in ownership, and requires Aplus's prior written consent, which can be withheld for any reason, although some transfers without a change of control may be completed without consent under certain conditions. The FDD also addresses conditions for Aplus's approval of transfers, what happens in the event of death or disability of the developer, and non-competition covenants after termination, which restrict involvement in competitive businesses within the development area or 25 miles of an Aplus store for two years if the Development Agreement is prematurely terminated due to default.
For the standard Aplus franchise agreement, the FDD states that upon termination or expiration, the franchisee must transfer telephone numbers and listings to Aplus and comply with all other applicable provisions. Aplus has the option to assume the lease and/or purchase certain store assets. The document also specifies that Aplus has the right to transfer or assign its rights and obligations under the agreements. Transfers by the franchisee are defined as including transfers of the franchise, assets, or ownership changes, and require Aplus's prior approval. Conditions for approval include compliance with right of first refusal, payment of obligations, execution of releases, and the transferee meeting Aplus's requirements and executing required documents.