Is an Aplus franchisee required to provide documentation to Sunoco to evidence the payment of any tax?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
r 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, franchisees are responsible for filing the necessary tax returns and paying any property taxes associated with equipment purchased under the Equipment and Construction Funding Agreement. While the FDD does not explicitly state that franchisees must provide documentation to Sunoco as evidence of tax payments, it does state that Sunoco has the right to access all profit and loss statements, balance sheets, and supporting documentation directly from the franchisee or from the back office or accounting system.
This means that while franchisees may not be explicitly required to submit tax payment documentation, Sunoco has the right to request and access financial records that would include this information. Furthermore, franchisees are required to enter all sales, costs of sales, and business expenses into the back office system, which Sunoco has access to.
Therefore, a prospective Aplus franchisee should clarify with Sunoco the specific requirements for providing tax-related information and documentation. Understanding the extent of Sunoco's access to financial records and the franchisee's obligations regarding tax reporting is crucial for ensuring compliance and maintaining a transparent business relationship.