If Aplus chooses not to terminate the Franchise Agreement when the franchisee is in default, what additional fee can Aplus charge the franchisee?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
pace allocation/planogram requirements for the store by, for example, over expanding the beer/wine segment at
the store. This additional charge is in addition to and without prejudice to Franchisor's remedies for a material default/termination under the terms of the applicable agreement.
3.11. Limited Refund
Franchisor may refund the Franchise Fee if it chooses not to execute this Agreement for any reason, or otherwise specified in Attachment 1.
3.12. Default Fee
If Franch
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if a franchisee is in default of their agreement, Aplus has the option to impose a "Default Fee". This fee is up to $1,500 per event of default. In addition to the Default Fee, Aplus can charge the franchisee for the cost of re-inspections and the costs of enforcing compliance with the agreement.
The Default Fee must be paid by the franchisee within three days of demand from Aplus. Any late payments of the Default Fee are subject to interest charges, as outlined in Section 3.8 of the Aplus Franchise Agreement. This section likely details the specific interest rate that will be applied to late payments.
This clause in the Aplus franchise agreement means that franchisees need to be aware of the potential costs associated with non-compliance. While Aplus retains the right to terminate the agreement for a default, they can also choose to levy this Default Fee and associated costs, which could create a significant financial burden for the franchisee in addition to the original issue that caused the default.