Is there a limit to the fee Aw can charge for management services after the death or disability of a franchisee?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
If Papa Ray's Pizza Restaurant is not being managed by a manager approved by us within thirty (30) days after the death or permanent disability, we are authorized, but we are not required, to immediately appoint a manager to maintain the operations of Papa Ray's Pizza Restaurant. Our appointment of a manager for your Papa Ray's Pizza Restaurant will not relieve you of your obligations under this Agreement, and we will not be liable for any debts, losses, costs or expenses incurred in the operation of your Papa Ray's Pizza Restaurant or to any of your creditors for any products, materials, supplies or services purchased by your Papa Ray's Pizza Restaurant during any period in which it is managed by the manager appointed by us. We have the right to charge a reasonable non-refundable fee for such management services and to cease providing such management services at any time.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, in the event of the death or permanent disability of a franchisee (or any of their owners), Aw has the option to appoint a manager to maintain operations if a manager approved by them is not appointed within 30 days.
Aw retains the right to charge a "reasonable non-refundable fee" for these management services. However, the FDD does not specify a maximum amount or a formula for calculating what constitutes a "reasonable" fee. Aw also has the right to cease providing such management services at any time.
This lack of a defined limit on management fees could be a point of concern for prospective franchisees. It introduces uncertainty about potential costs in the event of death or disability, and the franchisee would have to rely on Aw's interpretation of "reasonable". It would be prudent for a potential franchisee to discuss this with Aw to gain a clearer understanding of how these fees are determined and what factors might influence the amount charged.