Under what condition will an Aplus franchisee remit payments directly to the Area Representative?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- (a) Franchisor may, in its sole discretion, utilize a relationship with parties known as Area Representatives who are designated by the Franchisor, within a defined geographic area, to assist in the offering of franchises for APLUS Stores. In addition, the Area Representative may be designated by Franchisor to perform the servicing of such APLUS Store in compliance with what is required of Franchisor in the Agreement and Manual. All Area Representatives are independent contractors and must complete a training program to Franchisor's satisfaction before they are permitted to assume their duties. Franchisor retains the right to compensate Area Representatives for services rendered by paying them a percentage of the Initial Franchise Fee and/or a percentage of the monthly Royalty fees collected from those APLUS stores located within the Area Representative's defined territory. Area Representatives do not collect these fees directly and do not share in any Marketing Fees paid by Franchisee. If such rights are assigned to the Area Representative, upon our notice Franchisee shall remit all such payments directly to the Area Representative.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a franchisee may be required to remit payments directly to the Area Representative under specific conditions. Aplus may designate Area Representatives to assist in offering franchises and servicing Aplus stores within defined geographic areas. These representatives are independent contractors trained to fulfill the franchisor's obligations as outlined in the franchise agreement and manual.
Aplus retains the right to compensate Area Representatives by paying them a percentage of the initial franchise fee or monthly royalty fees collected from stores within their territory. However, Area Representatives do not typically collect these fees directly or share in any marketing fees paid by the franchisee.
The key condition for direct payment to the Area Representative arises if Aplus assigns its rights to receive payments to the Area Representative. In such cases, Aplus will provide notice to the franchisee, who will then be obligated to remit all specified payments directly to the designated Area Representative. This delegation of payment responsibilities is a critical aspect of the Area Representative's role and the franchisee's obligations under the franchise agreement.