Under what condition is the Non-Compliance fee due for an Aplus store?
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 levied 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 notices of these failures within the same year, they will incur this additional charge. The fee could be substantial, as it is calculated as a percentage of gross sales, potentially impacting the franchisee's profitability. Alternatively, if Aplus's costs to enforce compliance exceed 1% of gross sales, the franchisee is responsible for covering those higher costs.
Franchisees should, therefore, ensure strict adherence to the franchise agreement to avoid receiving default notices. Understanding the specific reasons that could trigger a default notice is crucial. It would be prudent for a prospective franchisee to clarify with Aplus what constitutes a 'default notice' and what steps can be taken to rectify any issues before a notice is issued. Maintaining open communication with Aplus and promptly addressing any concerns can help prevent the accumulation of default notices and the imposition of this Non-Compliance Fee.