Under the Aplus Development Agreement, what happens to the initial franchise fee rate for subsequent franchise agreements?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
,000 + ($7,500 x 3) = $37,500].
When you sign the Development Agreement, you also will sign a franchise agreement for the first APLUS Store and/or SUNOCO fueling station, and we will credit part of your development fee payment to fully satisfy the initial franchise fee due under that agreement. As you get ready to develop additional APLUS Stores and/or SUNOCO fueling stations, you will sign our then-current form of franchise agreement and/or fueling station agreement. The terms of our then-current form of franchise agreement may be materially different than the terms of our current franchise agreement, but the initial franchise fee will be locked in at the rate described above. When you sign the second or subsequent franchise agreements, we will credit $7,500 of your development fee payment toward payment of the initial franchise fee due under the franchise agreement, and you
Source: Item 5 — INITIAL FEES (FDD pages 15–16)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if you sign a Development Agreement for multiple Aplus stores, the initial franchise fee for the second and subsequent stores is discounted. The initial franchise fee for the first Aplus store is $15,000, and this amount is payable under the franchise agreement. For each additional Aplus store to be developed, the initial franchise fee is discounted to 50%, which amounts to $7,500.
When signing the Development Agreement, a franchisee also signs a franchise agreement for the first Aplus store. A portion of the development fee is credited to fully satisfy the initial franchise fee for this first store. For subsequent Aplus stores, the franchisee will sign the then-current form of the franchise agreement, which may differ materially from the initial agreement. However, the initial franchise fee will remain locked in at the discounted rate of $7,500, with the franchisee paying the balance.
Specifically, when signing the second or subsequent franchise agreements, Aplus will credit $7,500 of the development fee payment toward the initial franchise fee, and the franchisee will pay the remaining $7,500. This arrangement provides a financial incentive for franchisees to commit to developing multiple Aplus stores, while also allowing Aplus to adapt the franchise agreement terms as needed for new franchisees.