What is the minimum monthly royalty fee for Aplus captive market locations?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
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Non-Leased APLUS Store
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee1 | Up to 4% of Gross Sales The difference between the actual monthly Royalty Fee paid and up to $1,000 ("Minimum Monthly Royalty Fee") | Monthly on the 20th of the month Monthly on the 20th day of the month payable with the Royalty Fee | |
| Royalty Fee (Captive Market Locations) | Up to 15% of Gross Sales The difference between the actual monthly Royalty Fee paid and up to $2,000 | Monthly on the 20th Monthly on the 20th day of the month payable with the Royalty Fee | For Captive Market locations, this increased Royalty Fee appli |
Source: Item 6 — OTHER FEES (FDD pages 16–28)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, franchisees operating in captive market locations are subject to a minimum monthly royalty fee. The royalty fee is up to 15% of gross sales. However, the franchisee will pay the difference between the actual monthly royalty fee and up to $2,000. Therefore, the minimum monthly royalty fee for captive market locations is $2,000.
This means that even if 15% of an Aplus franchisee's gross sales is less than $2,000 in a given month, they must still pay a minimum royalty fee of $2,000. This can impact the profitability of Aplus captive market locations, especially during slow sales periods.
Prospective Aplus franchisees should carefully consider the potential impact of this minimum royalty fee on their business's financial performance. It is important to factor this cost into their financial projections and ensure they have sufficient capital to cover this expense, especially during the initial months of operation when sales may be lower.