Under what condition is the Non-Compliance Fee due for an Aplus franchise, and what is the amount?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Monthly Royalty Fee") | |||
| Royalty Fee (Captive Market Locations) | Up to 15% of Gross Sales The difference between the actual monthly Royalty Fee paid and up to $2,000 | Monthly on the 20th Monthly on the 20th day of the month payable with the Royalty Fee | For Captive Market locations, this increased Royalty Fee applies instead of the regular Royalty Fee. |
| Alcoholic Beverages Assessment | 1% of Gross Sales | Monthly | Due only if you are prohibited by regulation or statute from selling alcoholic beverages or otherwise chooses not to offer or cannot offer for sale alcoholic beverages. |
| Non-Compliance Fee | Additional 1% of Gross Sales or actual costs of enforcement, whichever is higher | Monthly | Due if you receive two default notices in any 12-month period. |
| Rent2 | $5,000 to $34,000 | Monthly or Semi Monthly as required by lease terms | |
| Marketing Fee | Up to $1,500 or 2% of Gross Sales (whichever is less), currently $750 | Monthly on the 10th | |
| Kerosene Fee (if applicable) | $250 per month | Monthly | Not all APLUS Stores are allowed to offer kerosene for resale to the public. |
| Transfer Fee3 | Percentage of Transfer Consideration | When you submit your request for transfer | 100% transfer of all businesses operated at the APLUS Store. |
| Transfer Fee (for convenience)4 | $1,500 | When you submit your request for transfer | |
| Transfer Evaluation Fee | $1,000 | When billed | We have the right to charge this fee to cover our costs for evaluating the proposed transfer. |
| Audit Fee (standard audit) | 6% of the underreported amount | When billed | |
| Audit Cost | All costs and expenses associated | When billed | Due if your books or re |
Source: Item 6 — OTHER FEES (FDD pages 16–28)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a Non-Compliance Fee is imposed if a franchisee receives two default notices within a 12-month period. This fee is an additional 1% of gross sales or the actual costs of enforcement, whichever amount is higher. The fee is due monthly.
This means that if an Aplus franchisee fails to comply with the terms of the franchise agreement and receives two official default notices from Aplus within the same year, they will incur this extra charge. The fee could be a significant expense, especially if 1% of gross sales is a large number or if Aplus's enforcement costs are substantial.
For a prospective franchisee, this highlights the importance of adhering to the franchise agreement and addressing any issues promptly to avoid receiving default notices. It's also important to understand what constitutes a 'default' under the agreement. The Non-Compliance Fee serves as a financial disincentive for repeated failures to meet Aplus's standards and requirements.