How is the indemnification fee amount determined for an Aplus franchise?

According to Aplus's 2024 Franchise Disclosure Document, the indemnification fee is determined by the amount of loss or damages incurred, in addition to any associated costs. This fee is due as incurred.

In practical terms, this means that if a franchisee's actions or inactions lead to a loss or damages for which Aplus is held liable, the franchisee will be responsible for covering the full cost of those damages. This includes not only the direct financial losses but also any additional expenses Aplus incurs as a result, such as legal fees or settlement costs.

The fact that the indemnification fee is 'as incurred' means that a franchisee could face unexpected financial burdens at any point during the franchise agreement. It is important for prospective franchisees to fully understand the circumstances under which they might be required to indemnify Aplus and to assess their ability to cover potentially substantial costs. Franchisees should consult with a legal and financial advisor to evaluate this risk and ensure they have adequate insurance coverage and financial resources.