What are the franchisee's obligations regarding the equipment purchased under the Funding Agreement for an Aplus store?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if a franchisee accepts funding for equipment, they have several obligations regarding that equipment. The franchisee is responsible for maintaining the equipment in good repair and operating condition, and they must cover the costs of this maintenance.
If any equipment is stolen, lost, destroyed, or damaged beyond repair, the franchisee must replace it at their own expense. The replacement equipment then becomes the property of Sunoco. Similarly, the franchisee is responsible for replacing any parts of the equipment that become worn out, lost, destroyed, or damaged, and these replacement parts also become Sunoco's property.
Additionally, the franchisee must file the necessary tax returns and pay any property taxes associated with the equipment. They are also required to obtain insurance coverage for the equipment as specified in their agreement. These obligations ensure that the equipment remains in good working order and is adequately protected, but the franchisee bears the financial burden of these responsibilities.