factual

What specific brands of merchandise does Aplus require franchisees to sell in their stores?

Aplus Franchise · 2024 FDD

Answer from 2024 FDD Document

STRICTIONS ON SOURCES OF PRODUCTS & SERVICES**

In order to assure uniformity and consistency in all APLUS Stores, we require you to sell specific brands of merchandise at your APLUS Store. The Systems Manual sets forth minimum standards of quality and variety of merchandise offered for sale by you, specifications for equipment, uniforms and certain products. As we may deem necessary for operation of your APLUS Store, we have and will continue to engage with designated third parties to provide you with operational support, including but not limited to merchandising, promotional, marketing, and other functions on our behalf (each, a "Designated Service Provider"). Our Designated Service Provider will provide you with store-specific schematics (layouts), merchandise planograms and vendor-approved racks to which you must conform. Our Designated Service Provider will specify planograms by store design and provide such planograms for local merchandise options subject to our prior approval.

We will approve suppliers, which may be us or our affiliates, manufacturers, distributors, and other sources who demonstrate to our continuing, reasonable satisfaction the ability to meet our uniform standards and specifications and who possess adequate quality controls and capacity to supply your needs promptly and reliably ("Approved Suppliers").

We will provide you a list of Approved Suppliers that will be incorporated in the Systems Manual. We will remove the status of a previously Approved Supplier by notifying you in writing of the revocation and the reasons for the revocation. We may also require you to purchase certain items and services only from specific suppliers designated by us ("Designated Specific Suppliers"). We reserve the right to require your purchases from Approved Suppliers or Designated Specific Suppliers be made through a buying group administered by us or our third-party designee.

For goods and services that you are not required to purchase from an Approved Supplier, you may select any supplier at your discretion. However, we determine that a particular supplier does not meet our quality standards, including the favorable public image of the APLUS Program, we will notify you in writing and you must promptly discontinue purchasing from that supplier. At our discretion, Approved Suppliers may also make their products and services available to SUNOCO franchisees.

If you desire to purchase any of the items specified in this Item 8 from a supplier that is not an Approved Supplier, you or the supplier must submit to us a written request for approval. We have sole discretion over the approval of such suppliers. At a minimum they must demonstrate the ability to meet our standards and specifications and possess adequate quality controls and capacity to supply your needs promptly and reliably. We may inspect the proposed supplier's facilities, and require that we receive samples from the proposed supplier for testing prior to granting or denying approval. We may impose a charge that does not exceed the reasonable costs of our inspection and testing. This charge may be paid by you or the proposed supplier. We may re-inspect the facilities and products of any supplier at any time, and may revoke the prior approval if we determine that the supplier does not meet the quality standard that is consistent with the favorable public image of the APLUS Program. The APLUS Agreement imposes no time period in which we are required to exercise our right of approval or disapproval. All suppliers approved by us are required to sign an agreement indemnifying us for the supplier's products, actions andservices.

We reserve the right to establish maximum retail prices, subject to law, for certain convenience store products, specified by us, and for participation in certain APLUS promotions prices must be consistent with the advertised price. If you operate a Captive Market APLUS Store, you may be subject to any pricing constraints applicable to the concession and/or lease agreement.

You are required to purchase the following items only from our Approved Suppliers or Designated Specific Suppliers:

  • Food service products and suppliesincluding all APLUS and SUNOCO proprietary breakfast and sandwiches and other food items, equipment, cups, wrappings, containers and napkins,
  • Perishable food products offered in APlus stores, including sandwiches, roller grill items, baked goods, salads, foods served or taken hot, dairy (including milk, flavored milk and yogurt), bread, and such other perishable food products we determine only from Approved Suppliers,
  • Our designated proprietary, trademark, trade dress, service mark, logo, and insignia items, including retail merchandise,
  • Décor, supplies, and other items that bear the APLUS trademarks,
  • Uniforms,
  • Back office software and hardware,
  • Electronic Point-of-Sale (EPOS) and Data Transmission and Telecommunications Equipment,
  • Signs, promotional materials,
  • Store equipment,
  • Interior/exterior décor items, and
  • Fixtures, furnishings and other materials required for the operation of the APLUS Store.

In the event of an APLUS Store conversion, the existing equipment will be reviewed by us for conformance to our specifications. Before commencing operations, the approval for the continued use of existing equipment must be obtained by us.

The purchase of the items described in this Item 8 from Approved Suppliers can reasonably represent up to 40% - 55% of your initial investment in your APLUS Store. Sunoco may derive revenue from the lease or sale of products and services to you. In the year ending December 31, 2023, Sunoco's revenues from the sale of these products and services were a de minimus percentage of Sunoco's total revenues.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS & SERVICES (FDD pages 33–37)

What This Means (2024 FDD)

According to Aplus's 2024 Franchise Disclosure Document, franchisees are required to sell specific brands of merchandise to ensure uniformity and consistency across all Aplus stores. While the FDD does not list the specific brands, it does state that the Systems Manual sets forth minimum standards of quality and variety of merchandise. Aplus engages with Designated Service Providers who provide store-specific layouts, merchandise planograms, and vendor-approved racks to which franchisees must conform. These planograms are specified by store design and include local merchandise options, subject to Aplus's prior approval.

Aplus maintains a list of Approved Suppliers, which may include Aplus itself or its affiliates, manufacturers, and distributors. Franchisees are required to purchase certain items and services only from specific suppliers designated by Aplus. For goods and services not required to be purchased from Approved Suppliers, franchisees can select their own suppliers, but Aplus retains the right to disapprove any supplier that does not meet their quality standards or maintain a favorable public image.

Franchisees are required to participate in several Aplus programs, which include Hot and Cold Dispensed Beverages Programs, Food and Food Service Programs, Prepaid Programs, and ATM Programs. They must also participate in state agency licensed programs such as Beer and Wine, Tobacco Products, and Lottery programs, unless prohibited by regulation. Franchisees are required to purchase specific items from Approved Suppliers or Designated Specific Suppliers, including food service products and supplies, perishable food products, branded merchandise, décor, uniforms, back-office software and hardware, EPOS systems, signs, store equipment, and fixtures.

During the franchise term, Aplus may implement a buying group, requiring franchisees to purchase up to 90% of their total inventory and cigarette purchases from Approved Suppliers or Designated Specific Suppliers. Aplus may also establish maximum retail prices for certain convenience store products and promotions. These restrictions and requirements ensure that Aplus maintains consistent quality and brand standards across all franchise locations, but they also limit the franchisee's autonomy in selecting suppliers and products.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.