What is the requirement for franchisees regarding the maintenance of insurance coverage for their Aw Papa Ray's Pizza Restaurant?
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 are required to obtain and maintain specific insurance coverage for their Papa Ray's Pizza Restaurant. This includes comprehensive public liability, product liability, and motor vehicle liability insurance with minimum liability coverage of $1,000,000 per occurrence and $2,000,000 in the aggregate. This insurance protects against claims for bodily and personal injury, death, property damage, and injuries caused by or occurring in the operation of the restaurant.
In addition to liability coverage, franchisees must also maintain 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. Workers' compensation and employer's liability insurance are also required, as mandated by applicable law. Furthermore, franchisees need to secure business interruption insurance for a minimum of 12 months, ensuring coverage in case of unforeseen events that disrupt operations.
The cost of the required insurance coverage will vary depending on factors such as the insurance carrier's charges, terms of payment, and the franchisee's history. Aw requires that each insurance policy names Aw (and, if requested, its officers, members, manager, and employees) as an additional insured. Franchisees must also ensure that Aw receives 30 days advance written notice of any material modification, cancellation, or expiration of the policy, allowing Aw to stay informed and protected.
Maintaining adequate insurance coverage is a standard requirement in franchising, designed to protect both the franchisee and the franchisor from potential liabilities and losses. The specific coverage types and amounts required by Aw are typical for a restaurant business, reflecting the inherent risks associated with operating a food service establishment. Prospective franchisees should factor in these insurance costs when evaluating the overall investment and operating expenses of an Aw franchise.