Can Aplus require franchisees to purchase certain items and services only from specific suppliers?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
upplier. Approval of a supplier may be conditioned on the supplier's ability to provide sufficient quantity of product; quality of products or services at competitive prices; production and delivery capability; and dependability and general reputation. Nothing in this Section 13.1.3 shall be construed to require Franchisor to approve any particular supplier,
or to require Franchisor to make available to prospective suppliers, standards and specifications that Franchisor deems confidential.
- 13.1.4. Notwithstanding anything contrary in this Agreement, Franchisor has the right to review from time to time its approval of any items or suppliers. Franchisor may revoke its approval of any item, service or supplier at any time by notifying Franchisee and/or the supplier. Franchisee shall, at its own expense, promptly cease using, selling or providing any items or services disapproved by Franchisor.
- 13.1.5. If required under the terms of any buying group imposed by Franchisor, Franchisee agrees at all times during the Term to make the required total inventory purchases of up to ninety percent (90%) of your total inventory purchases and, separately, up to ninety percent (90%) of your cigarette purchases, both computed monthly at cost, from Approved Suppliers or Designated Specific Suppliers in compliance with the Approved Vendor Purchase Requirement.
- 13.1.6. Though the products, suppliers, or services are approved by the Franchisor, the Franchisor or its affiliate make no warranty and expressly disclaim all warranties, including warranties of merchantability for any particular purpose with respect to fixtures, furniture, equipment (including without limitation, any and all required computer systems) supplies or other approved items.
13.2. Appearance and Condition of the Franchised Business
Franchisee shall comply with the housekeeping and maintenance provisions in the Manual regarding the Premises, the APLUS Store, the Store Equipment, and if applicable, the Loaned Store Equipment. Franchisee shall comply with all repair, replacement, health, safety, and security standards and specifications of Franchisor and any applicable laws or regulations. The expense of such maintenance shall be borne by Franchisee and shall be in addition to any required System modifications, as described in Section 10.2.
13.3. Ownership and Management
- 13.3.1. The Franchised Business shall, at all times, be under the direct supervision of Franchisee. The Designated Manager shall devote full time and best efforts to the management of the dayto-day operation of the Franchised Business, but not less than forty (40) hours per week, including 8:30 a.m. to 4:30 p.m. on at least three weekdays (Monday through Friday), excluding vacation, sick leave and similar absences. Franchisee shall keep Franchisor informed, in writing, at all times of the identity of its Designated Manager. Franchisee must not engage in any business or other activities that will conflict with its obligations under this Agreement.
- 13.3.2.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Aplus franchisees may be required to purchase certain items and services from approved or designated suppliers. Aplus retains the right to review and revoke approval of any item, service, or supplier at any time by notifying the franchisee and/or the supplier. The franchisee is then responsible for ceasing the use, sale, or provision of any disapproved items or services.
Specifically, Aplus may implement a buying group that requires franchisees to make total inventory purchases of up to 90% of their total inventory purchases and, separately, up to 90% of their cigarette purchases from Approved Suppliers or Designated Specific Suppliers. These percentages are computed monthly at cost. This is referred to as the Approved Vendor Purchase Requirement.
The FDD also states that Aplus may require franchisees to participate in specific merchandise programs, which may include purchasing and installing specific equipment, merchandise, and/or products. Franchisees are also required to pay any associated third-party fees related to these programs. However, Aplus disclaims all warranties, including merchantability, for any particular purpose with respect to fixtures, furniture, equipment, supplies, or other approved items, even if the products, suppliers, or services are approved by Aplus.