What is the maximum royalty fee that an Aplus franchisee may be charged, and when is it due?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
roved APLUS Store from the approved location and no other business unless otherwise authorized pursuant to this Agreement or approved by us in writing.
3. FEES
3.1. Franchise Fee
Upon execution of this Agreement, Franchisee shall pay a fee ("Franchise Fee") to Franchisor in the amount stated on Summary Page. The Franchise Fee shall be deemed fully earned upon execution of this Agreement and is non-refundable, unless otherwise described herein.
3.2. Royalty Fee
Franchisee shall pay to Franchisor without offset, credit, or deduction of any nature, a fee ("Royalty Fee") in the amount stated and in compliance with the timeframe described on Attachment 1. The Franchisor requires Franchisee to pay Royalty Fees through electronic transfer as set forth in Section 3.7, which shall be submitted to Franchisor through a method that Franchisor approves.
3.3. Minimum Monthly Royalty Fee
If the Royalty Fee paid to Franchisor is less than the respective minimum monthly royalty fee ("Minimum Monthly Royalty Fee") as described in Attachment 1, then Franchisee shall pay to Franchisor the difference between monthly Royalty Fee and the respective Minimum Monthly Royalty Fee, payable at the same time and in the same manner as the Royalty Fee.
3.4. Collateral Security Deposit
Prior to the opening of the Store, you shall deposit with us cash collateral in the amount stated in Attachment 1 ("Collateral Security Deposit"). The Collateral Security Deposit shall be held by Sunoco as one general, continuing, collateral security for the discharge and payment of the whole, or any part of any present, past, or future obligation indebtedness, or liability of you to Sunoco. You agree to enter into any additional financing statements, security agreement, or other documents deemed necessary by Sunoco. Further:
- 3.4.1.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the standard royalty fee is detailed in Attachment 1, but the specific percentage is not provided in the excerpts. However, if a franchisee is prohibited from selling alcoholic beverages or chooses not to, they will pay an additional 1% of gross sales as an "Alcoholic Beverages Assessment" in addition to the standard royalty fee. If the Aplus store is in a location that prohibits royalties on alcohol sales, the royalty fee will increase by 1%, but gross sales will not include income from alcohol sales.
The Royalty Fee is paid to Aplus without any reductions and must be paid according to the timeframe described in Attachment 1. Aplus requires franchisees to pay Royalty Fees through electronic transfer, using a method that Aplus approves. If the royalty fee paid is less than the minimum monthly royalty fee described in Attachment 1, the franchisee must pay Aplus the difference between the monthly royalty fee and the minimum monthly royalty fee, payable at the same time and in the same manner as the royalty fee.
Interest will be charged at the highest rate allowed by law on all Royalty Fees, Marketing Fees, Technology Fees, and any other amounts not received by Aplus on the due date. Interest accrues from the date payment was due until it is received in full. The franchisee is responsible for covering all costs Aplus incurs while collecting unpaid amounts, including attorney fees.
Because the exact royalty fee percentage and due date are not specified in the provided excerpts, prospective franchisees should consult Attachment 1 of the FDD and ask Aplus for clarification on these points during their due diligence. Understanding the royalty fee structure is crucial for assessing the financial viability of an Aplus franchise.