Under what circumstances 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 fee for multi-site franchisees.
If you choose to operate your franchise in a Captive Market, we may charge a supplemental franchise fee ("Supplemental Franchise Fee") ranging from $15,000 to $300,000 depending on the location of your APLUS Store within the Captive Market. You may pay additional fees to state, county, or other government agency for your right to operate in a Captive Market. The amount and applicability of such a fee is determined solely by us based on a number of factors, including, but not limited to, historical store performance, sales volume, the amount paid by us or an affiliate to purchase the APLUS Store and the value of the goodwill of the APLUS Store.
Source: Item 5 — INITIAL FEES (FDD pages 15–16)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the initial franchise fee is generally $15,000, but Aplus reserves the right to waive or modify this fee under specific circumstances. These circumstances include situations where the location proposed for franchising already operates as a convenience store under a different trade name or trademark. This acknowledges the existing business's value and market presence. Aplus may also modify the fee if the proposed location is in an area with very few Aplus stores, incentivizing expansion into less saturated markets.
Another instance where Aplus may adjust the initial franchise fee is when the franchisee is already in, or is entering into, a motor fuel business relationship with Aplus or its affiliates. This likely aims to streamline operations and encourage synergy between fuel and convenience store services. Additionally, if the Aplus franchise operates within a Captive Market, the initial fee might be subject to modification. Aplus also reserves the right to modify or reduce the franchise fee for franchisees who commit to developing multiple locations, incentivizing larger-scale expansion and investment in the Aplus brand.
It's important to note that while Aplus may waive or modify the initial franchise fee, they may charge a supplemental franchise fee ranging from $15,000 to $300,000 if you operate in a Captive Market. The amount of this fee is determined by Aplus based on factors such as historical store performance, sales volume, the amount Aplus paid to purchase the store, and the value of the store's goodwill. Prospective franchisees should discuss these potential modifications and supplemental fees with Aplus to fully understand the financial implications based on their specific circumstances and location.
For franchisees considering multi-unit development, Aplus charges a non-refundable development fee. This fee is equal to 100% of the initial franchise fee for the first Aplus store ($15,000), plus 50% of the discounted initial franchise fee for each additional store. For example, a development agreement for four Aplus stores would incur a $37,500 development fee. A portion of this development fee is credited towards the initial franchise fee when signing franchise agreements for subsequent locations, specifically $7,500 per store.