Under what condition can Sunoco terminate the Aplus franchise agreement?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
en notice to you.
5.5. Air and Vacuum
You may participate in Sunoco's approved Air and Vacuum Program outlined in the Systems Manual. If you participate, you are required to have a minimum of one air tower, which meets Sunoco's specifications. Sunoco requires that each air tower be operational and accessible during all shifts. Sunoco reserves the right to include Air and Vacuum sales in the Gross Sales Calculation and charge Royalty Fees on such revenues.
5.6. Failure to Open
Franchisee must take possession of the APLUS Store and open by the Commencement Date. If Franchisee fails take possession of and open the APLUS Store for business on the Commencement Date, in addition to any other remedies herein provided, Sunoco, at its option, shall have the right to collect, as liquidated damages and not as a penalty, the prorated Minimum Royalty Fee per day for each calendar day you fail to open the APLUS Store for business. In addition, if you fail to take possession of and open the APLUS Store for business within thirty (30) days after the Commencement Date, Sunoco may terminate this Agreement. If this Agreement is terminated pursuant to this Section 5.6, Franchisor shall retain the entire Franchise Fee paid by Franchisee. The Franchise Fee retained shall be specifically understood and agreed by the parties to be in consideration of the services provided, time expended, work performed, and other efforts of Franchisor up to the date of Franchisee's failure to timely commence operations of the Franchised Business and shall not be construed as nor considered to be a penalty.
5.7. Relocation
Franchisee shall not relocate the Franchised Business without the prior written consent of Franchisor. If the parties do not agree upon a substitute site within ninety (90) days after Sunoco's receipt of your notice, this Agreement shall terminate as provided in Section 16.2.1. Any such relocation shall be at Franchisee's sole expense, and shall proceed in accordance with the Sunoco's then-current requirements and specifications. You agree to enter into a new APLUS Franchise Agreement for the balance of the term of this Agreement, however you will not be required to pay a new franchise fee.
5.8. Information System and Technologies
5.8.1. Franchisor may designate the information system used in the Franchised Business, including the computer hardware, software other equipment and enhancements (the "Information System"). If the Franchisee suspect or know of a security breach, the Franchisee shall immediately give notice of such security breach and promptly identify and remediate the source of any compromise of security breach at the Franchisee's expense. The Franchisee assumes all responsibility for providing all notices of breach or compromise and all duties to monitor credit histories and transactions concerning customers of the Franchised Business unless otherwise directed by the Franchisor.
The Franchisee is solely responsible for protecting itself from disruptions, internet access failures, Internet content failures, and attacks by hackers and other unauthorized intruders and the Franchisee waives any and all claims the Franchisee may have against the Franchisor and its affiliates as the direct or indirect
result of such disruptions, security breach and promptly identify and remediate the source of any compromise of security breach at the Franchisee's expense.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Sunoco has specific rights regarding the termination of the Aplus Franchise Agreement. Sunoco can terminate the agreement if the franchisee fails to take possession of and open the Aplus store for business within thirty days after the commencement date. In this case, Sunoco retains the entire franchise fee, which is understood as compensation for services, time, work, and efforts expended up to the point of the franchisee's failure to commence operations.
Additionally, Sunoco can terminate the lease if any default or violation under the Motor Fuel Supply Agreement results in grounds for termination or nonrenewal as outlined in the Petroleum Marketing Practices Act (PMPA). Termination is also possible if there is any default under the Aplus Franchise Agreement that leads to grounds for termination or nonrenewal of that agreement. Other causes for termination include the franchisee's failure to exert good faith efforts to comply with the provisions of the lease, the Aplus Franchise Agreement, the Motor Fuel Supply Agreement, or any related agreement after receiving written notice from Sunoco and a reasonable opportunity to comply.
Further reasons for termination by Aplus include unlawful, fraudulent, or deceptive acts or criminal misconduct by the franchisee, their employees, or representatives relevant to the operation of the premises. Misrepresentations or misstatements that induce Sunoco to enter into the lease can also lead to termination. The sale, display, rental, or distribution of prohibited merchandise or merchandise of a quality inconsistent with the franchise's image is another cause. A transfer or attempted transfer of the lease not in accordance with specified terms, operation of the premises in a manner hazardous to public health or safety, failure to comply with relevant laws, or loss of the right to conduct business at the premises can also result in termination. Sunoco also reserves the right to terminate the agreement if the franchisee does not complete the required construction or conversion of the premises to an Aplus store per system standards.
For a prospective Aplus franchisee, these termination conditions highlight the importance of fulfilling all contractual obligations, maintaining legal and ethical business practices, and adhering to Aplus's standards. Failure to meet these requirements could result in the termination of the franchise agreement and potential financial losses, including the loss of the franchise fee.