When is the Liquidated Damages fee payable to Aplus?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
nsfer of |
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| data to and from your APLUS Store. | |||
| Technology Fee | $330 to $600 | Monthly | This covers our providing to you required software licenses, access to our back-office system, helpdesk support, a website, e-mail set up, and email hosting for one email address. We reserve the right to reduce this fee, and upon written notice to you we may increase this fee. |
| Failure to Open Fee | Prorated Non Leased Minimum Monthly Royalty Fee per day for each calendar day you fail to open the APLUS Store for business | When billed | You must take possession and open the APLUS Store on the agreed upon commencement date. If you do not, we reserve the right to charge you the Failure to Open Fee. |
| Liquidated | See Note 4 | Upon | Payable if the APLUS Franchise |
| Damages4 | d |
Source: Item 6 — OTHER FEES (FDD pages 16–28)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the Liquidated Damages fee is payable 'upon demand'. This fee is charged if the Aplus Franchise Agreement is terminated early. The exact amount of the liquidated damages is detailed in Note 4 of Item 6, but the table specifies that it is due upon demand.
Specifically, Note 4 explains how the liquidated damages are calculated. The franchisee must pay a Liquidated Damage Royalty Fee equal to the higher of two calculations: (a) the running average Monthly Royalty Fee for the 12-month period immediately preceding the early termination date (or a shorter duration if the agreement hasn't been in effect for 12 months), or (b) the Monthly Royalty Fee calculated based upon the Annual Gross Sales Requirement set forth in the Aplus Franchise Agreement.
This means that if a franchisee terminates the agreement early, Aplus will demand payment of a fee designed to compensate them for the lost future royalties. The fee is calculated to be the greater of the average royalties from the past year or the royalties expected based on the annual sales requirements. Prospective franchisees should carefully consider these potential costs when evaluating the Aplus franchise opportunity, as early termination can result in a significant financial obligation to Aplus.