What insurance coverage must franchisees obtain and maintain before opening their Aw Papa Ray's Pizza Restaurant for business?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
nership interest in an approved supplier.
Before you open your Papa Ray's Pizza Restaurant for business, you must obtain and maintain the insurance coverage that we require from time to time and meet other insurance-related
obligations described in the Franchise Agreement. Currently, you must maintain insurance as follows: (1) comprehensive public liability, product liability and motor vehicle liability (including hired and non-owned auto liability) insurance against claims for bodily and personal injury, death, property damage and injuries caused by or occurring in the operation of the Papa Ray's Pizza Restaurant or the conduct of business pursuant to the Franchise Agreement under one or more policies of insurance with minimum liability coverage of $1,000,000 per occurrence and $2,000,000 in the aggregate; (2) general casualty insurance including fire and extended coverage, vandalism, and malicious mischief insurance for the replacement value of the Papa Ray's Pizza Restaurant and its contents; (3) workers' compensation and employer's liability insurance as required by applicable law; and (4) business interruption insurance for a minimum of 12 months. The cost of this coverage will vary, depending on the insurance carrier's charges, terms of payment and your history. Each insurance policy must name us (and, if we request it, our officers, members, manager, and employees) as an additional insured and must provide us with 30 days advance written notice of any material modification,
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–21)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, franchisees must obtain and maintain several types of insurance coverage before opening their Papa Ray's Pizza Restaurant. This is a standard requirement in franchising to protect both the franchisee and the franchisor from potential liabilities and financial losses.
The required insurance includes comprehensive public liability, product liability, and motor vehicle liability insurance with minimum coverage of $1,000,000 per occurrence and $2,000,000 in the aggregate. This coverage protects against claims for bodily and personal injury, death, property damage, and injuries caused by the restaurant's operation. Franchisees must also secure general casualty insurance, including fire and extended coverage, vandalism, and malicious mischief insurance, sufficient to cover the replacement value of the restaurant and its contents.
Additionally, franchisees are obligated to carry workers' compensation and employer's liability insurance as mandated by applicable law, which covers employee injuries or illnesses sustained on the job. Business interruption insurance for a minimum of 12 months is also required, providing coverage for lost income and expenses if the restaurant is temporarily unable to operate due to unforeseen circumstances.
The cost of these insurance policies will vary based on the insurance carrier's charges, payment terms, and the franchisee's history. Each policy must name Aw (and potentially its officers, members, manager, and employees) as an additional insured and provide Aw with 30 days' advance written notice of any material modification, cancellation, or expiration. This ensures that Aw is informed of any changes that could affect their coverage and liability.