What is the minimum and maximum amount for the Collateral Security Deposit required for an Aplus franchise, and when is it due?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
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| 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 | demand | Agreement is terminated early. | |
| Collateral Security Deposit | $10,000 minimum and up to $20,000 | Before opening your APLUS Store | The Collateral Security Deposit varies based on your credit rating. If you operate an APLUS Franchise in a Captive Market, we may charge a higher Collateral Security Deposit. |
| National or Regional Conference | Up to $800 per person | Upon demand | We encourage but do not require your attendance at any regional or national conference. If you send an employee to our conference, you are responsible for his or her travel, wages, food, conference fee, and other costs related to attending. |
| Indemnification | Amount of loss or damages plus costs | As incurred | You must defend, indemnify, and hold us and our related parties harmless from all fines, suits, proceedings, claims, demands, obligations or actions of any kind (including costs and reasonable attorneys' fees) arising from your ownership, operation or occupation of your APLUS Store, performance or bre |
Source: Item 6 — OTHER FEES (FDD pages 16–28)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a franchisee must pay a Collateral Security Deposit. The amount ranges from a minimum of $10,000 up to $20,000. The exact amount depends on the franchisee's credit rating; Aplus may also charge a higher deposit for franchises operating in a Captive Market. This deposit is due before the Aplus store opens for business.
The purpose of the Collateral Security Deposit is to provide Aplus with a financial safeguard against potential franchisee debt or liabilities. Aplus can use the deposit to cover any outstanding amounts owed by the franchisee. If Aplus uses any portion of the deposit, the franchisee is obligated to replenish it to the original amount.
Under certain conditions, the unused portion of the Collateral Security Deposit is refundable to the franchisee. These conditions typically include the termination, nonrenewal, or expiration of the franchise agreement. This arrangement is a fairly standard practice in franchising, providing the franchisor with some financial protection while allowing for the eventual return of the deposit to the franchisee if all obligations are met.