Under what conditions is reimbursement for insurance costs payable to Aw?
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, franchisees are required to reimburse Aw for insurance costs under specific circumstances. If a franchisee fails to maintain the required insurance coverage, Aw may incur costs and premiums to purchase insurance on behalf of the franchisee. In such instances, the franchisee is obligated to reimburse Aw for the costs and premiums incurred.
The amount payable is equivalent to the costs and premiums Aw incurs to secure the insurance coverage. The due date for this reimbursement is upon demand, meaning Aw will request payment from the franchisee when these costs are incurred. This ensures that Aw is compensated for the expenses they bear in maintaining the necessary insurance coverage for the franchise operation when the franchisee fails to do so.
This condition highlights the importance of franchisees maintaining adequate insurance coverage as mandated by the franchise agreement. Failure to do so not only puts the franchisee at risk but also creates a financial obligation to reimburse Aw for any insurance costs they incur to ensure continuous coverage. This arrangement protects Aw from potential liabilities and ensures that all franchise locations meet the required insurance standards.