How will the Funded Amount be amortized for an Aplus franchise, and over what period?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
7. AMORTIZATION OF FUNDED AMOUNT; TERMINATION
- (a) The Funded Amount shall be amortized monthly in equal installments over the term of the Franchise Agreement, beginning in the first year of such Franchise Agreement. If this Agreement is terminated for any reason prior to the expiration of the Franchise Agreement, Franchisee shall repay to Sunoco the unamortized Funded Amount.
- (b) Sunoco shall maintain records indicating the total amount due and owing from Franchisee with respect to the Funded Amount, and shall, upon written request from Franchisee, provide Franchisee with copies of such records.
- (c) In the event the Franchise Agreement is terminated for any reason by Sunoco or Franchisee at any time prior to the expiration date
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 and construction, the 'Funded Amount' will be amortized monthly in equal installments. This amortization begins in the first year of the Aplus Franchise Agreement and continues over the term of the agreement.
If the Aplus Franchise Agreement is terminated for any reason before the end of its term, the franchisee is responsible for repaying Sunoco (the franchisor) the remaining unamortized portion of the Funded Amount. Sunoco will maintain records of the franchisee's balance related to the Funded Amount and will provide copies of these records upon the franchisee's written request.
This arrangement means that franchisees need to carefully consider the length of the franchise term and the implications of early termination. Early termination could result in a significant lump-sum repayment of the unamortized Funded Amount, in addition to any other termination-related fees or obligations. Prospective franchisees should clarify the exact term length, the amortization schedule, and potential termination scenarios with Aplus before signing the Franchise Agreement.