If Aplus exercises its option to purchase the assets of the Aplus franchised business, how is the purchase price determined?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor and or APLUS and/or SUNOCO franchisees to terminate or modify his, her or its business relationship with APLUS and/or SUNOCO; or
- 17.3.3 In furtherance of this Section 17, Franchisor has the right to require certain individuals to execute standard form nondisclosure agreements in a form the same as or similar to the Nondisclosure Agreement attached as Attachment 2.
- 17.3.4 The two (2) year period shall be tolled during any event of non-compliance.
- 17.4. Franchisor's Option to Purchase Certain Business Assets and Assume Lease
Franchisor has the right (but not the obligation), for a period of sixty (60) days after termination or expiration of this Agreement, to purchase any or all assets of the Franchised Business including improvements, vehicles, service tools and equipment, supplies and other inventory or equipment. The purchase price shall be equal to the assets' fair market value, as determined by an independent appraiser. If Franchisor elects to exercise this option to purchase, it has the right to set off all amounts due from Franchisee under this Agreement, if any, against the purchase price. If applicable, at Franchisor's request, Franchisee shall assign to Franchisor or its designee Franchisee's interest in the lease for APLUS Store, including Franchisee's interest in all leasehold improvements, without additional compensation. If Franchisor does not request assignment of the lease before or as of the date of expiration or termination of
this Agreement, then within twenty (20) days after termination or expiration of this Agreement, Franchisee shall modify the APLUS Store Premises, including, without limitation, the changing of the color scheme and other distinctive design features, as may be necessary to distinguish the appearance of the Franchised Business from that of other APLUS franchisee owned stores, and shall make such specific additional changes to the Franchisee's APLUS Store as Franchisor may reasonably request for that purpose.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if Aplus chooses to purchase the assets of a franchised business after the franchise agreement terminates or expires, the purchase price will be based on the fair market value of the assets. This includes items like improvements, vehicles, service tools, equipment, supplies, and inventory.
To determine the fair market value, Aplus will use an independent appraiser. This valuation method ensures an unbiased assessment of the assets' worth. Aplus also has the right to offset any amounts owed by the franchisee under the Franchise Agreement against this purchase price. This could include unpaid royalties, fees, or other financial obligations.
Additionally, Aplus may request the franchisee to assign their interest in the APLUS Store lease, including any leasehold improvements, to Aplus or its designee without additional compensation to the franchisee. If Aplus does not request the lease assignment, the franchisee is responsible for de-identifying the APLUS Store premises after termination or expiration of the agreement. This involves altering the color scheme and design to differentiate it from other Aplus locations. If the franchisee fails to do so, Aplus has the right to enter the premises and take necessary actions to de-identify it, charging the franchisee for the associated costs.