Under what conditions will an Aplus franchisee be required to pay an additional Alcoholic Beverages Assessment fee of 1% of Gross Sales?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
If Franchisee is prohibited by law from offering for sale alcoholic beverages at the Franchised Business, or otherwise chooses not to offer for sale alcoholic beverages at the Franchised Business, Franchisee shall pay an additional fee of 1% of Gross Sales ("Alcoholic Beverages Assessment") as indicated in Attachment 1, in addition to the Royalty Fee. If Franchisee's APLUS Store is located in a state or county that prohibits the collection of royalties on the sale of alcoholic beverages, the Royalty Fee will be increased by 1% provided the definition of Gross Sales will not include any income from the sale of alcoholic beverages. Franchisor reserves the right to impose an additional non-compliance fee (pursuant to Section 13.14) per month where a franchisee fails to continuously comply with Franchisor's space allocation/planogram requirements for the store by, for example, over expanding the beer/wine segment at
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, an Aplus franchisee will be required to pay an additional Alcoholic Beverages Assessment fee of 1% of Gross Sales under specific circumstances. This fee is applied if the franchisee is either legally prohibited from selling alcoholic beverages at their Aplus store or if they choose not to sell alcoholic beverages. This assessment is in addition to the standard Royalty Fee.
This policy appears designed to ensure that Aplus receives a consistent level of revenue from all franchise locations, regardless of whether they sell alcohol. For franchisees, this means that if they operate in a location where alcohol sales are not permitted or if they opt not to sell alcohol for other reasons, they will still need to remit an additional 1% of their gross sales to Aplus.
However, the FDD also states that if the Aplus store is located in a state or county that prohibits the collection of royalties on the sale of alcoholic beverages, the Royalty Fee will be increased by 1%, provided the definition of Gross Sales will not include any income from the sale of alcoholic beverages. Aplus also reserves the right to impose an additional non-compliance fee per month if a franchisee fails to continuously comply with Aplus's space allocation/planogram requirements for the store by, for example, over expanding the beer/wine segment at the store. This additional charge is in addition to and without prejudice to Aplus's remedies for a material default/termination under the terms of the applicable agreement.
Prospective franchisees should carefully consider these conditions and evaluate whether the potential revenue from alcohol sales justifies the standard royalty fee versus the Alcoholic Beverages Assessment fee if they choose not to sell alcohol. It would be prudent to discuss with Aplus the specific regulations in their intended location and how these fees would apply to their business.