What is the Equipment and Construction Funding Agreement for Aplus, and where can I find it?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
If you accept funding for your Store for equipment and construction, you must also execute the Equipment and Construction Funding Agreement, attached hereto as Attachment 7 and incorporated herein ("Funding Agreement"). Sunoco agrees to use the Funded Amount (as defined in the Funding Agreement, to offset the cost of equipment and construction at the Store and to pay invoices on Franchisee's behalf to a third party. If any portion of the Funded Amount remains after payment of the subject construction and equipment is made, Sunoco will release remaining funds to the Franchisee via a credit to Franchisee's account with Sunoco. The amount of funding offered to you will depend on whether your APlus Store is a newly constructed store or conversion APlus Store. Sunoco has the sole right to determine the amount of the funding.
The Funded Amount shall be amortized monthly in equal installments beginning in the first year of the term of APLUS Agreement. If APLUS Agreement is terminated for any reason prior to the expiration of the term, Franchisee shall repay to Sunoco the unamortized Funded Amount. Sunoco shall maintain records indicating the total amount due and owing from Franchisee with respect hereto and shall, upon written request by Franchisee, provide Franchisee with copies of such records. Franchisee's obligation to repay
the Funded Amount upon termination of this Agreement shall (a) be in addition to any other right or claims Sunoco has or may have with respect to such termination.
- 22.3.
As it relates to the equipment purchased under the Funding Agreement, you, at your own cost and expense, shall (a) maintain the equipment in good repair and operating condition, (b) replace any equipment that is stolen, lost, destroyed or damaged beyond repair, which replacement equipment shall become our property, (c) replace any parts of the equipment which become worn out, lost, destroyed or damaged, which replacement parts shall become our property, (d) file the necessary tax returns and pay any property taxes associated with the equipment, and (e) obtain insurance coverage for the equipment as required by the terms of your agreement.
Tax issues may arise with respect to the Funding Agreement.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the Equipment and Construction Funding Agreement is available if a franchisee accepts funding from Sunoco for equipment and construction of their Aplus store. This agreement, outlined in Item 23, is formally known as the Equipment and Construction Funding Agreement and is included as Attachment 7. Sunoco agrees to use the funds to offset equipment and construction costs, paying invoices to third parties on the franchisee's behalf. Any remaining funds after these payments will be credited to the franchisee's account with Sunoco. The amount of funding offered depends on whether the Aplus store is newly constructed or a conversion. Sunoco retains the sole right to determine the funding amount.
The funded amount is amortized monthly in equal installments starting in the first year of the APLUS Agreement. If the APLUS Agreement is terminated before the term expires, the franchisee must repay the unamortized funded amount to Sunoco. Sunoco will maintain records of the total amount owed by the franchisee and provide copies of these records upon written request. The franchisee's obligation to repay the funded amount upon termination is in addition to any other rights or claims Sunoco may have.
As it relates to the equipment purchased under the Funding Agreement, the franchisee is responsible for maintaining the equipment in good repair, replacing any lost, stolen, destroyed, or damaged equipment (which becomes Sunoco's property), replacing worn-out parts (which also become Sunoco's property), filing necessary tax returns, paying property taxes, and obtaining required insurance coverage. Tax issues may arise with respect to the Funding Agreement, and Sunoco does not provide tax advice, recommending that franchisees consult their own tax advisor. Sunoco reserves the right to terminate the agreement if the franchisee does not complete the required construction or conversion of the premises to APLUS store standards. The franchise fee and any other fees paid to Sunoco are nonrefundable.