What is the minimum monthly royalty fee for a non-leased Aplus store?

According to Aplus's 2024 Franchise Disclosure Document, the minimum monthly royalty fee for a non-leased Aplus store is addressed in Item 6, under the section detailing royalty fees. For a standard Aplus franchise, the royalty fee is up to 4% of Gross Sales. However, franchisees must pay the difference between their actual monthly royalty fee and up to $1,000. This means that even if 4% of gross sales is less than $1,000, the franchisee is still obligated to pay a minimum of $1,000 as the 'Minimum Monthly Royalty Fee'.

This minimum royalty fee ensures that Aplus receives a baseline income from each franchise unit, regardless of its sales performance. For a prospective franchisee, this means that even during slow sales months, they must be prepared to pay the $1,000 minimum. This could impact the franchisee's profitability, especially during the initial months of operation or during economic downturns.

It's important to note that this minimum royalty fee applies to standard Aplus locations. Captive Market locations have a different royalty fee structure, with a higher percentage of gross sales (up to 15%) and a higher minimum monthly royalty fee of up to $2,000. Therefore, understanding the type of location (standard vs. captive market) is crucial for accurately forecasting royalty expenses.

Franchisees should carefully consider their projected sales volume and ensure they can consistently meet or exceed the sales level required to pay more than the minimum royalty fee. Failing to do so could significantly reduce their profit margins and impact the overall financial viability of the Aplus franchise.