What is the Aplus Equipment and Construction Funding program for?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
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We offer an equipment and construction funding ("Equipment and Construction Funding") program for Non-Leased APLUS Stores. If you accept funding for your store from us ("Funded Amount"), we agree to use the Funded Amount to offset the cost of equipment and construction at the site and to pay invoices on your behalf to third parties. If any portion of the Funded Amount remains after payment of the subject construction and equipment is made, we will convert the remaining funds to a credit to your account with us. You may use this credit for amounts you owe to us, such as royalties and other fees. The amount of funding offered to you will depend on your APLUS Store's projected monthly merchandise sales.
If you choose to accept the Funded Amount, you will be required to execute the Equipment and Construction Funding agreement attached as Attachment 7 to the Franchise Agreement. The funded amount will be amortized monthly in equal installments during the term of the franchise agreement.
For a converted APLUS Store, the Funded Amount is generally 8.33% of the gross sales of the previous 12-month period. For example, $1,200,000 in gross sales of the previous 12-month period would qualify you for a maximum of $100,000. For a newly constructed APLUS Store, the Funded Amount is determined by a net present value and internal rate of return calculation based on the monthly sales volume projection provided by an independent market analysis compan
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 10–13)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the Equipment and Construction Funding program is available for Non-Leased APLUS Stores. If a franchisee is approved for funding, Aplus will use the 'Funded Amount' to offset equipment and construction costs at the store site, paying invoices directly to third parties on the franchisee's behalf. Any remaining funds after these payments are made will be converted into a credit on the franchisee's account with Aplus, which can be used to cover royalties and other fees owed to Aplus.
The amount of funding offered to an Aplus franchisee depends on the store's projected monthly merchandise sales. For converted Aplus stores, the Funded Amount is generally 8.33% of the gross sales of the previous 12-month period. For example, if a converted store had $1,200,000 in gross sales over the previous year, it would qualify for a maximum of $100,000 in funding. For newly constructed Aplus stores, the Funded Amount is determined by a net present value and internal rate of return calculation based on the monthly sales volume projection provided by an independent market analysis company.
If a franchisee chooses to accept the Funded Amount from Aplus, they will be required to sign the Equipment and Construction Funding agreement, which is attached as Attachment 7 to the Franchise Agreement. The funded amount will be amortized monthly in equal installments over the term of the franchise agreement. This arrangement allows franchisees to manage initial capital expenditures by spreading the cost over the life of the agreement, while also ensuring that Aplus has some control over how the funds are used and a mechanism for recouping the investment through monthly payments.