Under what circumstances does an Aplus franchisee have to pay the $1,000 administrative fee?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
n affiliate. |
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Indemnification | Amount of loss or damages plus costs | As incurred | You must defend, indemnify, and hold us and our related parties harmless from all fines, suits, proceedings, claims, demands, obligations or actions of any kind (including costs and reasonable attorneys' fees) arising from the performance of your obligations under the Development Agreement. |
| Administrative | $1,000 | As incurred | You must pay us this administrative fee if you fail to obtain minimum insurance requirements and we elect to obtain the missing |
Source: Item 6 — OTHER FEES (FDD pages 16–28)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, an Aplus franchisee must pay a $1,000 administrative fee if they fail to obtain the minimum required insurance coverage and Aplus elects to obtain the missing insurance policies on their behalf. This fee is incurred as needed ('as incurred').
This means that maintaining adequate insurance is not just a general business responsibility, but a specific contractual obligation under the Aplus franchise agreement. Failure to comply can result in Aplus stepping in to secure the necessary coverage, but at the franchisee's expense. The $1,000 administrative fee is in addition to the cost of the insurance policies themselves.
For a prospective Aplus franchisee, this highlights the importance of understanding and meeting all insurance requirements outlined in the franchise agreement. Failing to do so can lead to unexpected costs and potential disputes with the franchisor. It would be prudent to discuss these insurance requirements in detail with Aplus during the due diligence process and to obtain quotes from multiple insurance providers to ensure compliance at the best possible price.