Under what circumstances would an Aplus franchisee be required to sign a Premises Lease?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
t grant any person or entity the right to perform any part of Franchisee's rights or obligations licensed hereunder.
2.3. Non-Exclusive Territory
You will not receive an exclusive territory or any protected territory. You may face competition from other franchisees, from outlets that we, or our Affiliate, own, or from other channels of distribution or competitive brands that we control and any reserved rights we may have pursuant to this Agreement.
2.4. Premises
You may receive either a Leased APLUS Store or Non-Leased APLUS Store, as indicated on the Summary Page. Further the Leased APLUS Store or Non-Leased APLUS Store may be located in a Captive Market, for which you may be subject to additional fees. Terms of this Agreement are further amended by the respective terms in Attachment 1. You must only operate the approved APLUS Store from the approved location and no other business unless otherwise authorized pursuant to this Agreement or approved by us in writing.
3. FEES
3.1. Franchise Fee
Upon execution of this Agreement, Franchisee shall pay a fee ("Franchise Fee") to Franchisor in the amount stated on Summary Page. The Franchise Fee shall be deemed fully earned upon execution of this Agreement and is non-refundable, unless otherwise described herein.
3.2. Royalty Fee
Franchisee shall pay to Franchisor without offset, credit, or deduction of any nature, a fee ("Royalty Fee") in the amount stated and in compliance with the timeframe described on Attachment 1. The Franchisor requires Franchisee to pay Royalty Fees through electronic transfer as set forth in Section 3.7, which shall be submitted to Franchisor through a method that Franchisor approves.
3.3.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, whether a franchisee is required to sign a premises lease depends on whether they operate a "Leased APLUS Store" or a "Non-Leased APLUS Store," as indicated on the Summary Page of the Franchise Agreement. The FDD also mentions that Leased or Non-Leased APLUS Stores may be located in Captive Markets, potentially subjecting franchisees to additional fees.
For franchisees operating a Leased APLUS Store, the franchisor's obligation to renew the franchise agreement is contingent upon the franchisor maintaining ownership or a direct property interest in the premises. This implies that if Aplus owns or directly controls the property, the franchisee will likely be required to sign a lease agreement with Aplus or its affiliate.
The document also states that upon termination or expiration of the franchise agreement, the franchisor may request the franchisee to assign their interest in the lease for the APLUS Store to the franchisor or its designee. This clause further emphasizes the importance of the premises lease in the Aplus franchise system, as it allows the franchisor to maintain control over the location even after a franchisee exits the system. Prospective franchisees should carefully review the terms of the lease agreement and understand their obligations regarding the premises, especially in the event of termination or non-renewal of the franchise agreement.