What happens if the Aplus Agreement is terminated before the end of its term regarding the Funded Amount?
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 of the Franchise Agreement, Franchisee agrees to repay Sunoco the unamortized Funded Amount as of the effective date of the termination of the Franchise Agreement.
- (d) Franchisee's obligation to repay the Funded Amount as set forth above is in addition to any other payment obligations under the Franchise Agreement and any other rights or claims Sunoco has or may have with respect to such termination under any and all agreements between Franchisee and Sunoco.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if the Aplus Agreement is terminated for any reason before the end of its term, the franchisee is responsible for repaying the unamortized portion of the Funded Amount to Sunoco. This Funded Amount is initially provided by Sunoco to offset equipment and construction costs at the store, with any remaining funds credited to the franchisee's account. The amount of funding offered depends on whether the Aplus store is newly constructed or a conversion.
Sunoco keeps records of the total amount owed by the franchisee regarding the Funded Amount and will provide copies of these records upon the franchisee's written request. The franchisee's obligation to repay the unamortized Funded Amount is in addition to any other payment obligations under the Franchise Agreement and any other rights or claims Sunoco may have related to the termination.
This means that if an Aplus franchisee's agreement is terminated early, they will not only lose the franchise but also be required to pay back the remaining portion of the funds that were initially provided for store setup. This repayment obligation exists regardless of the reason for termination, whether initiated by Sunoco or the franchisee, and is separate from any other fees or damages that may be due. Prospective franchisees should carefully consider this financial obligation and its potential impact on their business if the franchise agreement is terminated prematurely.