What happens if the Aplus store fails to open for business on the Commencement Date?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee must take possession of the APLUS Store and open by the Commencement Date. If Franchisee fails take possession of and open the APLUS Store for business on the Commencement Date, in addition to any other remedies herein provided, Sunoco, at its option, shall have the right to collect, as liquidated damages and not as a penalty, the prorated Minimum Royalty Fee per day for each calendar day you fail to open the APLUS Store for business. In addition, if you fail to take possession of and open the APLUS Store for business within thirty (30) days after the Commencement Date, Sunoco may terminate this Agreement. If this Agreement is terminated pursuant to this Section 5.6, Franchisor shall retain the entire Franchise Fee paid by Franchisee. The Franchise Fee retained shall be specifically understood and agreed by the parties to be in consideration of the services provided, time expended, work performed, and other efforts of Franchisor up to the date of Franchisee's failure to timely commence operations of the Franchised Business and shall not be construed as nor considered to be a penalty.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a franchisee must take possession of the Aplus store and open it by the Commencement Date. If the franchisee fails to take possession and open the Aplus store on the Commencement Date, Aplus, at its option, can collect the prorated Minimum Royalty Fee per day as liquidated damages, not as a penalty, for each day the store remains unopened.
In addition to the prorated Minimum Royalty Fee, if the franchisee fails to open the Aplus store within thirty days after the Commencement Date, Aplus has the option to terminate the Franchise Agreement.
If Aplus terminates the agreement due to the franchisee's failure to open the store, Aplus will retain the entire Franchise Fee paid by the franchisee. The FDD states that this retained Franchise Fee is in consideration of the services provided, time expended, work performed, and other efforts of Aplus up to the date of the franchisee's failure to timely commence operations and will not be considered a penalty.