What exhibit outlines the collateral assignment of lease agreement for the Aw franchise?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT 1: Location of Premises and Protected Area
EXHIBIT 2: Guaranty and Assumption of Obligations
EXHIBIT 3: Collateral Assignment of Lease
EXHIBIT 4: Collateral Assignment of Telephone Number and Social Media Accounts
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the Collateral Assignment of Lease is outlined in Exhibit 3 to the Franchise Agreement. This exhibit is a standard contract within the franchise agreement.
This agreement allows Aw, under certain conditions, to take over the franchisee's lease. Specifically, Aw can exercise this assignment if the franchisee defaults on the lease or the Franchise Agreement, or upon the expiration or termination of the Franchise Agreement. This provides Aw with a mechanism to maintain control over the location of the franchise, which is crucial for business continuity and brand consistency.
Prospective Aw franchisees should carefully review Exhibit 3 and understand the conditions under which Aw can assume the lease. Franchisees should also be aware of their obligations under the lease agreement and the Franchise Agreement to avoid default and potential loss of their business location. It is also important to note that the lessor's consent may be required for this collateral assignment to be effective.