Does the Aw franchise agreement specify that the franchisee must pay service charges due to Aw 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 Aw's 2025 Franchise Disclosure Document, the franchise agreement stipulates that upon termination or expiration of the agreement, the franchisee is obligated to pay any outstanding service charges to Aw. Specifically, within ten days of the termination or expiration date, the franchisee must remit all royalty fees, marketing fund contributions, service charges, and any other amounts owed to Aw and its affiliates.
This requirement ensures that Aw receives all payments due for services rendered during the franchise term, even after the agreement concludes. It is a standard practice in franchising to settle all financial obligations upon termination to ensure a clean break between the parties. The franchisee must also provide a complete accounting of all amounts owed at the time of payment.
For a prospective Aw franchisee, this means being prepared to settle all outstanding financial obligations promptly upon termination or expiration of the franchise agreement. Failure to do so could result in further legal action or penalties. It is crucial to maintain accurate financial records and understand the terms of the franchise agreement regarding payments to avoid any disputes upon termination.