What is the 'E-Commerce Platform Program' for Apricot Lane franchisees?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
Certain franchisees may qualify to participate in the franchisor-approved e-commerce platform program (the "E-Commerce Platform Program"). Through the E-Commerce Platform Program, qualifying franchisees may sell certain fashion apparel, accessories and other merchandise to customers through the franchisor-approved e-commerce distribution channel. Qualifying franchisees will be those who are not in default under their franchise agreement(s) with us, meet our then-current criteria for participation, and submit all application and any other materials that we request, including a signed Amendment for E-Commerce Platform, the current form of which is attached to this Disclosure Document as Exhibit B-1.
"L. E-Commerce Platform.
Subject to the terms and conditions of this Subsection L, Franchisee has the right, using the Designated Mark (and other Marks authorized by Franchisor from time to time), to offer and sell through one or more third-party Internet websites or other electronic media authorized by Franchisor from time to time ("E-Commerce Platform") the merchandise to be sold at the Franchised Business in accordance with the terms of this Agreement. The E-Commerce Platform shall be deemed part of the Franchised Business and subject to all of the relevant terms and conditions under this Agreement. Franchisee acknowledges and agrees that e-commerce is rapidly evolving, with constant changes, and that Franchisor has the right from time to time to change the E-Commerce Platform (including substituting providers and using different technology) to maintain the competitiveness of Specialty Stores. Franchisor will give reasonable prior notice to Franchisee of any such changes, which in no event need to be more than 90 days. Franchisee agrees to discontinue use of any E-Commerce Platform that Franchisor no longer authorizes and will only use the then-current authorized E-Commerce Platform, notwithstanding that changes may result in costs and expenses to Franchisee. Franchisee shall execute and perform such agreements ("Provider's Contracts") with the provider of the
E-Commerce Platform ("Provider") as Franchisor requires from time to time (including requirements authorizing independent access to the E-Commerce Platform and Usage Data by Franchisor). Currently, Franchisor has designated "Shopify" as the sole and exclusive E-Commerce Platform, but, as noted above, Franchisor reserves the right to change the E-Commerce Platform in the future.
All revenue and income of any nature earned or derived in connection with the E-Commerce Platform shall be part of Gross Revenues under Section 12C and subject to all of the provisions under this Agreement (including royalty fees and advertising contributions), provided however, the Royalty and advertising contributions under Sections 12A and 11B, respectively, relating to Gross Revenues derived from the E-Commerce Platform shall be five and one-half percent (5.5%) and one percent (1%), respectively, notwithstanding anything to the contrary by which Franchisee is entitled to pay lesser percentage amounts due to operating multiple Apricot Lane stores or otherwise.
Franchisee agrees that Franchisor, for and on behalf of Franchisee, may at its option (but shall not be required to) enter into the Provider's Contracts for Franchisee's E-Commerce Platform and to be the administrator thereof and have complete and unrestricted access thereto. In connection with such Franchisor-arranged E-Commerce Platform: (i) Franchisee shall remit to Franchisor (or, at Franchisor's direction, remit directly to the Provider) all fees, costs, expenses and reimbursements required to be paid to the Provider; and (ii) Franchisee shall comply with all terms and conditions of the Provider's Contracts and all mandatory policies issued by Franchisor or Provider in connection therewith.
Franchisee shall procure and maintain in accordance with Section 10 such insurance policies in connection with the E-Commerce Platform as Franchisor may require from time to time and shall indemnify Franchisor, in accordance with Section 21C, for any liabilities, obligations and expenses incurred by Franchisor in connection with the E-Commerce Platform, including any liability, obligation or expense arising under the Provider Contracts.
Franchisee may use only such suppliers (which may include Franchisor or any of its Affiliates) as Franchisor may designate or approve from time to time for initial and ongoing design, management and maintenance services of the E-Commerce Platform.
Franchisee shall adhere to such development, design, marketing, sales and operations standards (including policies regarding quality, image and representative lines of merchandise, digital media advertising, minimal standards for terms and conditions, photography, reporting, packaging, merchandise returns and gift cards) as set forth in the Confidential Operations Manual from time to time.
Franchisor respects the intellectual property of others, and expects Franchisee to do the same with the E-Commerce Platform. Franchisor reserves the right to disable or terminate Franchisee's right to use the E-Commerce Platform if Franchisee infringes the copyrights or other intellectual property rights of others. Franchisee shall not rent, lease, distribute (or redistribute) or otherwise make available the E-Commerce Platform, in any form, to any third party without Franchisor's consent. Franchisor shall not unreasonably withhold consent to Franchisee making the E-Commerce Platform available for use by other Apricot Lane stores owned by Franchisee or any of its affiliates, subject to such conditions and requirements Franchisor may impose from time to time.
Franchisee's use of the E-Commerce Platform is solely to support the Franchised Business, and Franchisee shall not copy, distribute or transfer any portion of the E-Commerce Platform on any media or alter, adapt or otherwise modify any part of the E-Commerce Platform except as may be set forth in the Confidential Operating Manual or consented to by Franchisor.
FRANCHISOR IS UNDER NO OBLIGATION TO MAINTAIN THE E-COMMERCE PLATFORM, INCLUDING ANY CONTENT CONTAINED IN THE E-COMMERCE PLATFORM. FRANCHISOR RESERVES THE RIGHT TO WITHHOLD, REMOVE AND DISCARD ANY CONTENT ON THE E-COMMERCE PLATFORM, WITH OR WITHOUT NOTICE AT ANY TIME. FRANCHISEE IS RESPONSIBLE FOR SEPARATELY BACKING-UP ALL OF ITS DATA AND INFORMATION. FRANCHISEE'S USE OF THE
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–9)
What This Means (2025 FDD)
According to Apricot Lane's 2025 Franchise Disclosure Document, the 'E-Commerce Platform Program' allows qualifying franchisees to sell fashion apparel, accessories, and other merchandise through a franchisor-approved online channel. To qualify, franchisees must not be in default of their franchise agreement, meet the franchisor's current criteria, and submit all required application materials, including a signed amendment. This program expands the franchisee's market reach beyond the physical store, potentially increasing revenue by tapping into online sales. However, participation is not guaranteed and depends on meeting specific requirements set by Apricot Lane.
The E-Commerce Platform is considered part of the franchised business and is subject to the terms of the Franchise Agreement. Apricot Lane has the right to change the platform, including providers and technology, to maintain competitiveness, providing franchisees with reasonable notice, which need not exceed 90 days. Currently, Shopify is the designated platform, but Apricot Lane can change this in the future. Franchisees must discontinue using any platform that Apricot Lane no longer authorizes and use the current authorized platform, even if it results in costs to the franchisee. This highlights the importance of adaptability and the potential for additional expenses to keep up with Apricot Lane's evolving e-commerce strategy.
All revenue generated through the E-Commerce Platform is considered part of gross revenues and is subject to royalty fees and advertising contributions. The royalty fee is 5.5%, and the advertising contribution is 1%, regardless of any lower percentages a franchisee might otherwise be entitled to due to operating multiple Apricot Lane stores. Apricot Lane may also enter into contracts with providers on behalf of the franchisee and administer the platform, requiring franchisees to remit all fees and comply with the provider's terms. Franchisees are responsible for maintaining required insurance policies and indemnifying Apricot Lane for any liabilities related to the E-Commerce Platform, including those arising from provider contracts. This indicates that while Apricot Lane provides the platform, the franchisee bears the financial responsibility for its operation and any associated risks.
Franchisees are restricted to using suppliers designated or approved by Apricot Lane for the design, management, and maintenance of the E-Commerce Platform. They must also adhere to standards set by Apricot Lane for development, design, marketing, sales, and operations, including policies on quality, image, merchandise, advertising, and returns, as detailed in the Confidential Operations Manual. Apricot Lane reserves the right to disable or terminate a franchisee's right to use the E-Commerce Platform if they infringe on intellectual property rights. The franchisor is not obligated to maintain the platform and can remove content at any time, making it crucial for franchisees to back up their data. This underscores Apricot Lane's control over the E-Commerce Platform and the franchisee's dependence on adhering to the franchisor's standards and policies.