When is the Collateral Security Deposit due for an Aplus franchise, and what is the amount?
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.
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 Aplus store. The amount of this deposit is determined by Sunoco, but it will be no less than $10,000, or another amount stated in Attachment 1 of the franchise agreement.
Sunoco holds this deposit as security for any present, past, or future obligations the franchisee may have to Sunoco. The franchisee is also required to sign any additional financing statements or security agreements that Sunoco deems necessary. Sunoco retains the right to increase the required Collateral Security Deposit or demand additional security both before the store opens and at any point during the contractual period.
The amount of the Collateral Security Deposit may be changed, substituted, reduced, or increased at any time by mutual agreement between Sunoco and the franchisee. The franchisee must ensure that all deposited funds are free from third-party claims, assignments, trusts, and legal processes. This deposit serves as a continuing security for any debts the franchisee owes to Sunoco.