Under the Aplus franchise agreement, what must a franchisee do to assist Sunoco in pursuing legal remedies for expenses resulting from repairs or replacements to equipment or Premises?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- (E) Franchisee will submit to Sunoco a completed Damage Report, in the event of any damage to Sunoco's Equipment or Premises.
Such Damage Report must include names of persons involved, date, time, names of witnesses, names of insurance companies, and nature and extent of damages.
- (F) Sunoco will make diligent efforts to recover costs of repair or replacement from persons liable for damages to its Equipment or Premises, and will reimburse Franchisee for any costs to recover, but Franchisee retains primary responsibility, as stated above.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the franchisee has specific responsibilities regarding damage to Sunoco's equipment or premises. In the event of any damage, the franchisee must submit a completed Damage Report to Sunoco. This report must include critical details such as the names of individuals involved, the date and time of the incident, names of any witnesses, names of insurance companies, and a comprehensive description of the nature and extent of the damages.
Sunoco, according to the FDD, will then make diligent efforts to recover the costs associated with the repair or replacement of the damaged equipment or premises from those liable. While Sunoco takes the lead in these recovery efforts, the franchisee is expected to reimburse Sunoco for any costs incurred during the recovery process. However, the FDD stipulates that the franchisee retains primary responsibility for the damage, meaning they are ultimately accountable for the costs.
This arrangement implies that while Sunoco will attempt to recoup expenses from responsible third parties, the franchisee bears the initial and ultimate burden of ensuring that damages are addressed. This could involve direct payment for repairs or replacements, even if Sunoco is pursuing legal action against another party. Franchisees should be aware of this financial responsibility and ensure they have adequate insurance coverage to mitigate potential losses from damage to equipment or the premises.
It's also important to note that Sunoco retains the right to determine how best to repair or replace damaged equipment or premises and may require the franchisee to follow specific directions for repair and/or replacement. If the franchisee fails to comply with Sunoco's directions, Sunoco can repair or replace the damaged property to its standards, with the costs billed to and paid by the franchisee.