Under what circumstances, besides legal requirements, can Sunoco terminate or nonrenew the Aplus lease?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
(C) Sunoco reserves the right to assess an additional Royalty Fee of one percent (1%) of your total Gross Sales in any month in which a default notice is issued on any deficiency for which a previous default notice had been issued within a twelve (12) month period. This additional one percent (1%) Monthly Royalty Fee shall be assessed on your total Gross Sales for the month in which the second default is issued and will be collected in the month following the notice of assessment to you.
- (D) The remedies set forth in (B) and (C) above are in addition to and not in waiver of Sunoco's other rights and remedies arising from such default(s) including termination or nonrenewal of this Lease.
1.30 Termination or Nonrenewal
Sunoco's Right to Terminate or Nonrenew
- (A) Except as provided by law, Sunoco may, in addition to any other remedies it may have and subject to the valid requirements of any applicable statute, terminate or nonrenew this Lease if any default or violation under the Motor Fuel Supply Agreement results in grounds for termination or nonrenewal as set forth in the Petroleum Marketing Practices Act, 15 U.S.C. § 2801 et seq. ("PMPA"), or if any default under the APlus Franchise Agreement results in grounds for termination or nonrenewal of that agreement, or upon the occurrence of any of the following:
- (1) your failure to exert good faith efforts to comply with the provisions of this Lease, the APlus Franchise Agreement, the Motor Fuel Supply Agreement, or any related agreement between you and Sunoco, or between you and a third party contractor that performs services under this Lease, following written notice to you from Sunoco of such failure and a reasonable opportunity to exert good faith efforts to comply with such provisions;
- (2) unlawful, fraudulent, or deceptive acts or practices or criminal misconduct by you, your employees, or representatives relevant to the operation of the Premises;
- (3) your misrepresentations or misstatements that induce Sunoco to enter into this Lease;
- (4) the sale, display, rental, or distribution at the APlus Store of prohibited merchandise or of any merchandise or service that Sunoco has notified you is of a quality that is not consistent with the favorable image of the Franchise;
- (5) a transfer or attempted transfer of this Lease in a manner that is not in accordance with Section 2.22 herein:
- (6) operation of the Premises in a manner hazardous to public health or safety, your failure to comply with federal, state, or local laws or regulations relevant to the operation of the APlus Store, or your loss of the right under applicable laws or regulations to conduct business at the Premises;
- (7) your failure to obtain the release of any attachment, garnishment, execution, lien, or levy against the Premises or the APlus Store within seventy-two (72) hours of receiving notice of same;
- (8) your declaration of bankruptcy or judicial determination of your insolvency; the entry by you into any arrangement with creditors or any assignment for the benefit of creditors; or the commencement of any proceeding to appoint, or the appointment of, a receiver or trustee for you or for your business or property;
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Sunoco can terminate or nonrenew the lease under several circumstances, in addition to legal requirements. These include if a default or violation under the Motor Fuel Supply Agreement results in grounds for termination or nonrenewal as set forth in the Petroleum Marketing Practices Act, or if any default under the Aplus Franchise Agreement results in grounds for termination or nonrenewal of that agreement.
Other reasons for termination or nonrenewal include the franchisee's failure to exert good faith efforts to comply with the provisions of the lease, the Aplus Franchise Agreement, the Motor Fuel Supply Agreement, or any related agreement after receiving written notice from Sunoco and a reasonable opportunity to comply. Unlawful, fraudulent, or deceptive acts or practices, or criminal misconduct by the franchisee, their employees, or representatives relevant to the operation of the premises can also lead to termination or nonrenewal. Misrepresentations or misstatements that induce Sunoco to enter into the lease are also grounds for termination or nonrenewal.
Further reasons for termination or nonrenewal involve the sale, display, rental, or distribution of prohibited merchandise or merchandise/services that Sunoco deems inconsistent with the franchise's image. A transfer or attempted transfer of the lease not in accordance with specified terms, operation of the premises in a manner hazardous to public health or safety, failure to comply with relevant laws/regulations, or loss of the right to conduct business at the premises can also result in termination. Conviction of the franchisee or their designated personal supervisor of any felony involving moral turpitude, failure to maintain required insurance coverage, numerous customer complaints, termination/nonrenewal of the Aplus Franchise Agreement, or loss of the right to sell Sunoco branded motor fuels are additional reasons.
Finally, Sunoco may terminate or nonrenew if they decide to withdraw from marketing motor fuels through retail outlets or from the Aplus convenience store business in the relevant geographic market area, if they lose the right to license the use of their trademarks, or if any other event relevant to the relationship between the parties makes termination or nonrenewal reasonable.