To be eligible for a successor franchise, must the Aplus franchisee have satisfied all monetary obligations owed to Aplus (or any Affiliate) and met these obligations timely throughout the term of the agreement?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- 4.2.1. Franchisee and each Owner has, during the entire term of this Agreement, substantially complied with all material provisions of this Agreement, ancillary agreements to this Agreement, the Manual, and if applicable, the Premises Lease and/or the Sunoco Motor Fuel Supply Agreement;
- 4.2.2. Franchisee has entered into a written commitment to, update and refurbish the Franchised Business and Store equipment within the time frame established by Franchisor, to reflect Franchisor's thencurrent standards and specifications applicable to the System;
- 4.2.3. Franchisee has satisfied all monetary obligations owed by Franchisee to Franchisor (or any Affiliate), and has timely met these obligations throughout the term of this Agreement;
- 4.2.4. Neither Franchisee nor each Owner is in default of any provision of this Agreement or any other agreement between Franchisee and Franchisor (or any Affiliate);
- 4.2.5. Franchisee has given written notice of its intent to operate a successor franchise to Franchisor not less than ninety (90) days nor more than one hundred and eighty (180) days prior to the end of the term of this Agreement;
- 4.2.6. Franchisee has met Franchisor's then-current qualification criteria and has executed Franchisor's then-current form of Franchise Agreement (or has executed other documents at Franchisor's election that modify this Agreement to reflect the fact that the Franchise Agreement relates to the grant of a successor franchise), which the then-current Franchise Agreement shall supersede this Agreement in all respects, and the terms of which may materially differ from the terms of this Agreement by requiring, among other things, a different percentage Royalty Fee, or Marketing Fee;
- 4.2.7. Franchisee and each Owner has complied with Franchisor's then-current training requirements; and
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a franchisee must meet certain requirements to be eligible for a successor franchise agreement. One of these requirements is that the franchisee must have satisfied all monetary obligations owed to Aplus (or any affiliate) and must have met these obligations in a timely manner throughout the term of the franchise agreement.
In practical terms, this means that if a franchisee wants to renew their agreement for another term, they cannot have any outstanding debts to Aplus or its affiliates. Furthermore, they must have consistently paid all fees, royalties, and other payments on time throughout the duration of their current agreement. This includes adhering to the payment schedules and methods outlined in the franchise agreement, such as electronic transfers for royalty fees as mentioned in Section 3.7.
This requirement protects Aplus's financial interests and ensures that franchisees are responsible and reliable business partners. For a prospective franchisee, this highlights the importance of maintaining good financial standing with Aplus from the outset. Failure to do so could jeopardize their chances of securing a renewal and continuing to operate their Aplus franchise beyond the initial term. Franchisees should carefully review the payment terms and obligations outlined in the franchise agreement and budget accordingly to avoid any late payments or outstanding debts.