Does Aw require franchisees to purchase and maintain insurance coverage?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
s, uniforms and other supplies.
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- Insurance. You must purchase and maintain insurance coverage in minimum amounts we require. The required insurance is described in Item 8 of this Disclosure Document and in the Franchise Agreement. The premiums that franchisees will be charged will vary from market to market. The low estimate is for a minimum initial payment and the high estimate is for payment in full of the annual premium.
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- Miscellaneous Pre-Opening Expenses. This estimate includes the cost of building permits, business licenses, food certifications and legal and accounting fees.
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Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 16–19)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, franchisees are required to purchase and maintain insurance coverage. Item 7 includes an estimated cost for insurance, ranging from $900 to $16,000, payable as incurred and arranged with an insurance company. Item 7 also states that the required insurance is described in Item 8 of the Disclosure Document and in the Franchise Agreement. The premiums charged to franchisees will vary depending on the market. The low estimate covers a minimum initial payment, while the high estimate covers payment in full of the annual premium.
This requirement is standard practice in franchising, as it protects both the franchisee and Aw from potential liabilities. The wide range in estimated insurance costs suggests that factors such as location, coverage levels, and the franchisee's risk profile can significantly impact premiums.
Prospective franchisees should carefully review Item 8 of the FDD and the Franchise Agreement to understand the specific types and minimum amounts of insurance coverage required by Aw. It would be prudent to obtain quotes from multiple insurance providers to get a more accurate estimate of insurance costs in their specific market. Understanding these insurance obligations is crucial for budgeting and managing the financial risks associated with operating an Aw franchise.