Is the fee charged by Aw for management services after the death or disability of a franchisee refundable?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
If Papa Ray's Pizza Restaurant is not being managed by a manager approved by us within thirty (30) days after the death or permanent disability, we are authorized, but we are not required, to immediately appoint a manager to maintain the operations of Papa Ray's Pizza Restaurant. Our appointment of a manager for your Papa Ray's Pizza Restaurant will not relieve you of your obligations under this Agreement, and we will not be liable for any debts, losses, costs or expenses incurred in the operation of your Papa Ray's Pizza Restaurant or to any of your creditors for any products, materials, supplies or services purchased by your Papa Ray's Pizza Restaurant during any period in which it is managed by the manager appointed by us. We have the right to charge a reasonable non-refundable fee for such management services and to cease providing such management services at any time.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, in the event of the death or permanent disability of a franchisee, Aw has the right to appoint a manager to maintain the operations of the Papa Ray's Pizza Restaurant if a suitable manager is not appointed within thirty days. Aw is authorized to charge a fee for these management services.
The critical point for a prospective Aw franchisee is that this fee for management services is explicitly described as non-refundable. This means that regardless of the circumstances, the fee paid to Aw for managing the restaurant during this transition period will not be returned.
This non-refundable fee could represent a significant expense during an already difficult time. The FDD does not specify the amount of this management fee, only stating that it will be a 'reasonable' fee. It is important for a prospective franchisee to discuss with Aw what factors go into determining this fee and to get an estimate of what it might be to fully understand the potential financial implications.