Under what conditions can Sunoco issue a written default notice to an Aplus franchisee?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
1.29 Default Notices
- (A) If you are in default of a provision of this Lease, Sunoco may issue you a written default notice.
- (B) If Sunoco issues you a written default notice for your breach of any provision of this Lease, and, if after forty-eight (48) hours from receipt of the default notice, you have not cured the breach, Sunoco may, at its sole discretion, perform the necessary work to cure the condition and charge you for the reasonable costs incurred by Sunoco in performing the work.
- (C) Sunoco reserves the right to assess an additional Royalty Fee of one percent (1%) of your total Gross Sales in any month in which a default notice is issued on any deficiency for which a previous default notice had been issued within a twelve (12) month period. This additional one percent (1%) Monthly Royalty Fee shall be assessed on your total Gross Sales for the month in which the second default is issued and will be collected in the month following the notice of assessment to you.
- (D) The remedies set forth in (B) and (C) above are in addition to and not in waiver of Sunoco's other rights and remedies arising from such default(s) including termination or nonrenewal of this Lease.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Sunoco may issue a written default notice to an Aplus franchisee if the franchisee is in default of any provision of the lease agreement. If the franchisee fails to cure the breach within 48 hours of receiving the default notice, Sunoco has the option to perform the necessary work to correct the condition and charge the franchisee for the reasonable costs incurred.
Furthermore, Sunoco can assess an additional Royalty Fee of 1% of the franchisee's total Gross Sales for any month in which a default notice is issued, provided a previous default notice had been issued for the same deficiency within the preceding 12-month period. This additional royalty fee will be applied to the total gross sales for the month the second default notice is issued and will be collected the following month.
It is important to note that these remedies are in addition to any other rights and remedies Sunoco may have, including termination or nonrenewal of the lease. This means that receiving a default notice could lead to further financial penalties or even the loss of the franchise if the issues are not resolved promptly and effectively.