What triggers the obligation for an Aw franchisee to reimburse insurance costs?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE1,3 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| omissions, our enforcement of this Agreement, our defense of our actions taken under this Agreement or your breach of the Franchise Agreement. | |||
| Costs and Attorney's Fees | Will vary under circumstances | As incurred | You must reimburse us for costs and attorney's fees we incur in actions against you to enforce the Franchise Agreement. |
| Reimbursement for insurance costs | Costs and premiums incurred by us on your behalf. | Upon demand | Payable if we incur costs to purchase insurance for you if you fail to do so. |
| Reimbursement of Taxes | Actual assessed taxes against us for your operation of your business or on any payments you make to us. | Upon demand | Only payable if taxes of this type are assessed against us. |
| Software license fees | Undetermined since proprietary software has not yet been developed. | As arranged | Payable if we develop proprietary software that you must use for operating your Papa Ray’s Pizza Restaurant. |
Source: Item 6 — OTHER FEES (FDD pages 13–16)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, a franchisee is obligated to reimburse Aw for insurance costs if the franchisee fails to purchase insurance themselves. In such instances, Aw may incur costs and premiums to purchase insurance on behalf of the franchisee.
The amount due is the total costs and premiums Aw incurs. The franchisee must pay this amount upon demand from Aw. This is in addition to other fees that may be required.
This condition is fairly standard in franchising. Franchisors often require franchisees to maintain certain insurance coverages to protect the brand and the business. If a franchisee fails to maintain the required insurance, the franchisor typically has the right to obtain the insurance and charge the franchisee for the costs.