Does the Aw franchise agreement require payment of service charges after termination or expiration?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.1 Payment of Amounts Owed to the Company. You agree to pay to us within ten (10) days after the effective date of termination or expiration (without renewal) of this Agreement such royalty fees, marketing fund contributions, service charges due us on any of the foregoing and all other amounts owed to us and our affiliates which are then unpaid. You must furnish a complete accounting of all such amounts owed to us and our affiliates with the payment.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to the 2025 Aw Franchise Disclosure Document, upon termination or expiration of the franchise agreement, franchisees are required to pay any outstanding service charges. Specifically, within ten days of the termination or expiration date, the franchisee must pay all royalty fees, marketing fund contributions, service charges, and any other amounts owed to Aw and its affiliates.
This obligation ensures that Aw franchisees fulfill all financial responsibilities to the company even after the franchise agreement ends. It is a standard practice in franchising to ensure all debts are settled to avoid potential legal disputes and maintain financial clarity. Franchisees should maintain meticulous records of all payments and amounts owed to ensure accurate accounting during the termination or expiration process.
Prospective Aw franchisees should be aware of this requirement and factor it into their financial planning. Understanding the terms of termination, including the payment of outstanding service charges, is crucial for a smooth transition and to avoid any post-termination disputes with Aw. Franchisees should seek clarification from Aw regarding any specific service charges that may apply and ensure they understand the calculation and payment process.