What is Exhibit 3 to the Aw Franchise Agreement?

According to the 2025 Aw Franchise Disclosure Document, Exhibit 3 to the Franchise Agreement is the Collateral Assignment of Lease. This document likely outlines the terms under which the franchisee's lease can be used as collateral, potentially in securing financing or fulfilling other obligations related to the franchise agreement.

For a prospective Aw franchisee, understanding the Collateral Assignment of Lease is crucial. It details the circumstances under which the lease of the business premises could be transferred or assigned to a third party, typically the franchisor or a lender, as security. This arrangement protects the franchisor or lender by ensuring they have recourse to the business location if the franchisee defaults on their obligations.

It is important for the franchisee to carefully review this exhibit with legal counsel to fully grasp the implications. The franchisee should understand what events could trigger the collateral assignment, the rights and responsibilities of all parties involved (franchisee, franchisor, and any lender), and the process for regaining control of the lease once the obligations are satisfied. This exhibit is a standard component of many franchise agreements where real estate is involved, but its specific terms can vary and should be thoroughly understood.