Which exhibit to the Aw franchise agreement covers the collateral assignment of the lease?

According to the 2025 FDD, Exhibit 3 to the Aw franchise agreement contains the collateral assignment of the lease. This exhibit outlines the terms and conditions under which the franchisee's lease can be assigned to Aw as collateral. This is a common practice in franchising, as it provides the franchisor with a security interest in the location of the franchise.

Specifically, Aw may require that the lease be collaterally assigned to them, with the lessor's consent if needed. This assignment can be exercised if the franchisee defaults under the lease or the Franchise Agreement, or upon the expiration or termination of the Franchise Agreement. The lessor must also provide written notice to Aw of any default by the franchisee and allow Aw an additional 15 days to cure the default if the franchisee fails to do so.

This collateral assignment ensures that Aw has the option to take over the lease and continue operating the franchise at that location if the franchisee fails to meet their obligations. It also protects Aw's brand and system standards by allowing them to control the location and prevent it from being used for a competing business. Franchisees should carefully review Exhibit 3 and discuss any concerns with Aw before signing the Franchise Agreement.