If the Aplus Franchise Agreement is terminated early, is the franchisee's obligation to repay the Funded Amount in addition to other payment obligations?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
The Funded Amount shall be amortized monthly in equal installments beginning in the first year of the term of APLUS Agreement. If APLUS Agreement is terminated for any reason prior to the expiration of the term, Franchisee shall repay to Sunoco the unamortized Funded Amount. Sunoco shall maintain records indicating the total amount due and owing from Franchisee with respect hereto and shall, upon written request by Franchisee, provide Franchisee with copies of such records. Franchisee's obligation to repay
the Funded Amount upon termination of this Agreement shall (a) be in addition to any other right or claims Sunoco has or may have with respect to such termination.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if the Aplus Franchise Agreement is terminated early, the franchisee is obligated to repay the unamortized Funded Amount to Sunoco. This repayment is in addition to any other payment obligations the franchisee may have under the Franchise Agreement and any other rights or claims Sunoco may have due to the termination. The Funded Amount refers to the funding Sunoco provides for equipment and construction at the Aplus store.
Sunoco maintains records of the total amount due from the franchisee regarding the Funded Amount and will provide copies of these records upon the franchisee's written request. The Funded Amount is amortized monthly in equal installments over the term of the Franchise Agreement, starting in the first year. If the agreement terminates before the end of its term, the franchisee must repay the remaining unamortized amount.
This clause ensures that Sunoco recovers the remaining balance of the funds provided for equipment and construction if the franchise agreement is cut short. For a prospective Aplus franchisee, this means understanding that early termination can result in a significant financial obligation beyond typical termination fees or penalties. It's crucial to factor this potential repayment into financial planning and risk assessment when considering the franchise opportunity.