If either Sunoco or the Aplus franchisee terminates the Franchise Agreement early, what is the franchisee obligated to do regarding the unamortized Funded Amount?

According to Aplus's 2024 Franchise Disclosure Document, if the Franchise Agreement is terminated early, the franchisee is obligated to repay Sunoco the unamortized portion of the Funded Amount. The Funded Amount is used by Sunoco to offset equipment and construction costs at the Aplus store, paying invoices to third parties on the franchisee's behalf. Any remaining funds after these payments are credited to the franchisee's account with Sunoco. The amount of funding offered depends on whether the Aplus store is newly constructed or a conversion. Sunoco maintains records of the total amount owed by the franchisee and will provide copies of these records upon written request.

This repayment obligation 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. The Funded Amount is amortized monthly in equal installments over the term of the Franchise Agreement, starting in the first year. The franchisee's responsibility to repay the unamortized Funded Amount is triggered regardless of whether Sunoco or the franchisee initiates the termination.

This aspect of the agreement carries significant financial implications for prospective Aplus franchisees. Early termination, whether voluntary or involuntary, could result in a substantial immediate repayment obligation, potentially creating a significant financial burden on the franchisee. Franchisees should carefully consider the length of the franchise term and their ability to fulfill the agreement before accepting funding for equipment and construction. Understanding the amortization schedule and potential repayment obligations is crucial for managing financial risks associated with the Aplus franchise.