In what situations might Aplus waive or modify the initial franchise fee?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
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Initial Franchise Fee
You will pay us an initial franchise fee of $15,000. The franchise fee is payable in full when you sign
Sunoco Retail LLC
the franchise agreement. The initial franchise fee is refundable if we do not execute the franchise agreement for any reason, or if we are unable to timely fulfill certain obligations during construction of a Leased APLUS Store. The initial franchise fee is otherwise fully earned upon receipt and is nonrefundable.
The initial franchise fee is generally calculated uniformly for all franchisees, however we reserve the right to waive or modify the initial franchise fee in circumstances where the location proposed to be franchised has been operating as a convenience store under a different trade name/trademark, where the location proposed is in a particular area where there is a very limited amount of APLUS stores, where the franchisee is or is entering into a motor fuel business relationship with us or our affiliate or where the APLUS franchise operation is located in a Captive Market. In addition, we reserve the right to modify or reduce the franchise
Source: Item 5 — INITIAL FEES (FDD pages 15–16)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the standard initial franchise fee is $15,000. However, Aplus retains the discretion to waive or modify this fee under specific circumstances. These circumstances include situations where the proposed franchise location already operates as a convenience store under a different trade name or trademark. This acknowledges the existing business's value and potential transition costs.
Another instance where Aplus may adjust the initial franchise fee is when the location is in an area with a limited number of existing Aplus stores. This could be an incentive to encourage franchise development in less saturated markets. Furthermore, if the franchisee has or is entering into a motor fuel business relationship with Aplus or its affiliates, this may also warrant a fee adjustment, potentially reflecting synergies between the fuel and convenience store operations. The location of the Aplus franchise within a Captive Market is another factor that could lead to a modified fee.
Finally, Aplus also reserves the right to modify or reduce the initial franchise fee for franchisees who commit to developing multiple locations. This is a common practice in franchising, as multi-unit operators often bring economies of scale and a stronger commitment to the brand. It's important to note that while Aplus outlines these potential scenarios for fee modification, the ultimate decision rests with Aplus.
Prospective franchisees should discuss these possibilities with Aplus during their due diligence to understand if their specific circumstances might qualify for a waiver or modification of the initial franchise fee. Understanding these potential adjustments can significantly impact the initial investment required to start an Aplus franchise.