For Aplus franchisees, what is Sunoco's role in paying for equipment, and how does the franchisee receive proof of ownership?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
as furnished by you.
- 22.1.5. Within thirty (30) days after receipt of the Final Plans, you shall apply for all licenses, permits, variances and other governmental approvals ("Permits") necessary for such construction or conversion and you shall undertake construction or conversion at the earliest possible date. You shall construct or convert the Premises to an APLUS Store, as the case may be, in accordance with the Final Plans and shall not make alterations or changes to the Store except with the prior written consent of Sunoco during the term hereof.
22.2. Equipment and Construction Funding Agreement
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.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Sunoco may provide funding to offset the costs of equipment and construction at the Aplus store. If a franchisee accepts this funding, they must execute an Equipment and Construction Funding Agreement. Sunoco will then use the 'Funded Amount' to pay invoices on the franchisee's behalf to a third party. If any funds remain after these payments, Sunoco will credit the remaining amount 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 has the sole discretion 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 end of its term, the franchisee must repay the unamortized Funded Amount to Sunoco. Sunoco maintains records of the total amount owed by the franchisee and will 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.
Regarding proof of ownership, Sunoco or a third-party engineering firm will provide the franchisee with a Bill of Sale covering ownership of the equipment, itemizing the specific equipment covered. This documentation serves as the franchisee's proof of ownership for the equipment that Sunoco has funded. The franchisee is responsible for maintaining the equipment, replacing any damaged or lost equipment (which then becomes Sunoco's property), filing tax returns, paying property taxes, and obtaining insurance coverage for the equipment.