Aw 2025 Franchise FAQ - FDD Ninja

Question 1

Considering the restrictions on sources of products and services for Aw in Item 8, what specific pre-opening purchases/leases are franchisees obligated to make, as outlined in Item 9, and what is the estimated cost range for these purchases as per Item 7, considering potential variations based on location, supplier agreements, required equipment, inventory levels, ongoing operational costs, long-term financial sustainability, and overall supply chain management?

Accepted Answer

ITIAL INVESTMENT**

| Type of Expenditure | Amount- Range Estimated | Method of Payment | When Payable | To Whom Payment is Made |
|---|---|---|---|---|
| Initial Franchise Fee (Note 1) | $30,000 | 2 lump sum payments | ½ when you sign the franchise agreement; and ½ when we approve your location | Us |
| Travel and Living Costs while Training (Note 2) | $2,000 - $10,000 | As arranged | As agreed | Transportation lines, hotels, restaurants |
| Lease Security Deposit and Rent (1st 3 months) (Note 3) | $4,000 - $16,000 | As arranged | As arranged | Lessor |
| Leasehold Improvements | $30,000 - | As incurred | As agreed | Contractors |
| (Note 4) | $60,000 |  |  |  |
| Equipment/ Signage/ Furniture/Fixtures (Note 5) | $57,500 - $143,750 | As incurred | As agreed | Approved Suppliers |
| POS Computer Systems | $12,330 - | As incurred | As agreed | Designated |
| (Note 6) | $25,330 |  |  | Suppliers |
| Initial Inventory and Supplies (Note 7) | $10,000 - $19,000 | As incurred | As agreed | Designated and Approved Suppliers, including Us |
| Utility Deposits | $2,000 - $4,000 | As incurred | As arranged | Municipalities |
| Insurance (Note 8) | $900 – $16,000 | As incurred | As arranged | Insurance company |
| Miscellaneous Pre – Opening Expenses (Note 9) | $10,000 - $30,000 | As incurred | As incurred | Licensing agencies; Professional advisors |
| Grand Opening | $15,000 - | As incurred | During the 90 | Suppliers |
| Advertising (Note 10) | $30,000 |  | days after opening |  |
| Additional Funds (1st 3 | $40,000 - | As incurred | As incurred | You determine |
| months) (Note 11) | $80,000 |  |  |  |
| TOTAL ESTIMATED INITIAL INVESTMENT | $213,730 – $464,080 |  |  |  |![](_page_16_Picture_0.jpeg)

#### Explanatory Notes:

This is our estimate of the costs you will incur to develop and open a Papa Ray's Pizza Restaurant. The factors that underlie this estimate can vary considerably depending on a number of variables, and the actual investment you may make in developing and opening your Papa Ray's Pizza Restaurant may be less or greater than the estimates given. Payments to us are non-refundable. Payments to third parties are not expected to be refundable unless you directly negotiate this with a supplier.

- 1. **Initial Franchise Fee.** One-half of the initial franchise fee is paid to us when you sign the Franchise Agreement and the balance of the initial franchise fee is paid within 5 days of the date we approve the site for your Papa Ray's Pizza Restaurant. See Item 5 for a description of certain discounts available on the initial franchise fee.
- 2. **Training Expenses**. We do not charge a fee for the initial training program for up to 2 owners and/or managers. You are responsible for the cost of transportation and meals in attending the initial training. The amount of these costs will vary depending upon a number of factors, including travel distances from your residence and your choices for lodging and meals. This high estimate is based on 2 people attending training.
- 3. **Lease Security Deposit; Rent.** This estimate covers the security deposit and rent for the first 3 months for leasing a site ranging in size from 900 to 2,500 square feet. Typically the security deposit for the lease is one month's rent. The rent will vary depending on the size, type, condition and location of the premises. The low estimate assumes that you will be able to negotiate some free rent at the beginning of the lease. The estimate does not include purchasing a site which we would not recommend.
- 4. **Leasehold Improvements**. You must make certain leasehold improvements at the premises of Papa Ray's Pizza Restaurant according to our plans and specifications. The cost of the improvements vary greatly depending upon the size, condition, configuration, and geographical location of the premises, local zoning and building ordinances, labor and material costs, and other economic factors. This estimate includes the cost of an architect, if necessary, and contractors and building and decorating materials and supplies.

Question 2

In 2022, what was the total number of Aw outlets opened across all locations?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlets Opened | Terminations | Non- Renewals | Reacquired by Franchisor | Ceased Operations Other Reasons | Outlets at End of the Year |
|---|---|---|---|---|---|---|---|---|
| Illinois | 2022 | 4 | 2 | 0 | 0 | 0 | 1 | 5 |
|  | 2023 | 5 | 0 | 0 | 0 | 0 | 0 | 5 |
|  | 2024 | 5 | 0 | 0 | 0 | 0 | 2 | 3 |
| Indiana | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Total | 2022 | 5 | 2 | 0 | 0 | 0 | 1 | 6 |
|  | 2023 | 6 | 0 | 0 | 0 | 0 | 0 | 6 |
|  | 2024 | 6 | 0 | 0 | 0 | 0 | 2 | 4 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 37–39)

Question 3

Across all locations, how many Aw franchises were terminated in 2023?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlets Opened | Terminations | Non- Renewals | Reacquired by Franchisor | Ceased Operations Other Reasons | Outlets at End of the Year |
|---|---|---|---|---|---|---|---|---|
| Illinois | 2022 | 4 | 2 | 0 | 0 | 0 | 1 | 5 |
|  | 2023 | 5 | 0 | 0 | 0 | 0 | 0 | 5 |
|  | 2024 | 5 | 0 | 0 | 0 | 0 | 2 | 3 |
| Indiana | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Total | 2022 | 5 | 2 | 0 | 0 | 0 | 1 | 6 |
|  | 2023 | 6 | 0 | 0 | 0 | 0 | 0 | 6 |
|  | 2024 | 6 | 0 | 0 | 0 | 0 | 2 | 4 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 37–39)

Question 4

How many Aw outlets in total ceased operations for other reasons in 2024?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlets Opened | Terminations | Non- Renewals | Reacquired by Franchisor | Ceased Operations Other Reasons | Outlets at End of the Year |
|---|---|---|---|---|---|---|---|---|
| Illinois | 2022 | 4 | 2 | 0 | 0 | 0 | 1 | 5 |
|  | 2023 | 5 | 0 | 0 | 0 | 0 | 0 | 5 |
|  | 2024 | 5 | 0 | 0 | 0 | 0 | 2 | 3 |
| Indiana | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Total | 2022 | 5 | 2 | 0 | 0 | 0 | 1 | 6 |
|  | 2023 | 6 | 0 | 0 | 0 | 0 | 0 | 6 |
|  | 2024 | 6 | 0 | 0 | 0 | 0 | 2 | 4 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 37–39)

Question 5

What is the total amount of the Aw SBA loan payable?

Accepted Answer

% with a term of 30 years. Monthly payments of \$120 are scheduled to begin in 2023.

Minimum annual principal payments are as follows:

| Due in 2025            | \$ 532    |
|------------------------|--------------|
| Due in 2026            | 553

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)

Question 6

What was the total number of Aw outlets at the end of 2023?

Accepted Answer

| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---| 
| Franchised | 2022 | 5 | 6 | +1 |
|  | 2023 | 6 | 6 | 0 |
|  | 2024 | 6 | 4 | -2 |
| Affiliate- | 2022 | 2 | 1 | -1 |
| Owned |  |  |  |  |
|  | 2023 | 1 | 1 | 0 |
|  | 2024 | 1 | 1 | 0 |
| Total Outlets | 2022 | 7 | 7 | 0 |
|  | 2023 | 7 | 7 | 0 |
|  | 2024 | 7 | 5 | -2 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 37–39)

Question 7

What is the total number of Aw outlets (franchised and affiliate-owned) at the end of 2024?

Accepted Answer

| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---| 
| Franchised | 2022 | 5 | 6 | +1 |
|  | 2023 | 6 | 6 | 0 |
|  | 2024 | 6 | 4 | -2 |
| Affiliate- | 2022 | 2 | 1 | -1 |
| Owned |  |  |  |  |
|  | 2023 | 1 | 1 | 0 |
|  | 2024 | 1 | 1 | 0 |
| Total Outlets | 2022 | 7 | 7 | 0 |
|  | 2023 | 7 | 7 | 0 |
|  | 2024 | 7 | 5 | -2 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 37–39)

Question 8

What is the total projected number of Aw units to be opened by the franchisor or its affiliates in the next fiscal year, according to this table?

Accepted Answer

| STATE | FRANCHISE AGREEMENTS SIGNED BUT UNIT NOT OPEN | PROJECTED FRANCHISED NEW UNITS IN THE NEXT FISCAL YEAR | PROJECTED OPENINGS BY US OR OUR AFFILIATE IN NEXT FISCAL YEAR |
|---|---|---|---|
| Illinois | 0 | 0 | 0 |
| Indiana | 0 | 0 | 0 |
| TOTAL | 0 | 0 | 0 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 37–39)

Question 9

What is the estimated total cost for an Aw franchisee to attend required conferences, considering travel and living costs in Item 7 and any conference fees in Item 6?

Accepted Answer

s and locations designated by us. We may charge a tuition fee for any such training, seminars, meetings or webinars and you will be responsible for all expenses incurred by you, your Owners and/or your managers in attending these programs.
- 5.4 **Annual Conference.** Each year during the term of this Agreement, you, a Principal Owner and/or your Operating Manager must attend our Annual Conference for franchisees if we hold such a conference. We may charge you a fee to attend the conference ("Annual Conference Registration Fee"). In addition, you are responsible for all travel expenses incurred by you, your Owners and/or Operating Manager in attending the conference. This provision does not obligate us to hold an Annual Conference of franchisees each year. If an Annual Conference is not held, you are not obligated to pay the Annual Conference Registration Fee. If you fail to attend any Annual Conference during the term of this Agreement, you remain obligated to pay the Annual Conference Registration Fee. We may require you to attend separate training, in addition to any other rights and remedies available to us, for your breach of this provision.

#### 6. **OPERATING ASSISTANCE; OPERATIONS MANUAL**

6.1 **Operating Assistance.** During the term of this Agreement, we will from time to time furnish you ongoing assistance in connection with the operation of your Papa Ray's Pizza Restaurant. Operating assistance may include advice and guidance with respect to: (1) the provision of the services and the sale of the products authorized for sale by Papa Ray's Pizza Restaurants, (2) specifications, standards, and operating procedures for Papa Ray's Pizza Restaurants; (3) food preparation and presentation methods; (4) purchasing approved equipment, furniture, furnishings, signs, products, operating materials and supplies; (5) development and implementation of local advertising and promotional programs; (6) administrative, bookkeeping, accounting, inventory control and general operating and management procedures; (7)

Question 10

What is the estimated total cost for an Aw franchisee to attend required conferences, considering travel and living costs in Item 7, any conference fees in Item 6, and potential penalties for failing to attend?

Accepted Answer

- 5.4 **Annual Conference.** Each year during the term of this Agreement, you, a Principal Owner and/or your Operating Manager must attend our Annual Conference for franchisees if we hold such a conference. We may charge you a fee to attend the conference ("Annual Conference Registration Fee"). In addition, you are responsible for all travel expenses incurred by you, your Owners and/or Operating Manager in attending the conference. This provision does not obligate us to hold an Annual Conference of franchisees each year. If an Annual Conference is not held, you are not obligated to pay the Annual Conference Registration Fee. If you fail to attend any Annual Conference during the term of this Agreement, you remain obligated to pay the Annual Conference Registration Fee.

Question 11

What is the estimated total cost for an Aw franchisee to attend required conferences, considering travel and living costs in Item 7, any conference fees in Item 6, potential penalties for failing to attend, and the frequency of required conferences?

Accepted Answer

- 5.3 **Supplemental Education.** We may from time to time provide, and may require, that you, your Owners and/or managers attend and successfully complete supplemental training, seminars, regional franchise meetings or webinars to be conducted at times and locations designated by us. We may charge a tuition fee for any such training, seminars, meetings or webinars and you will be responsible for all expenses incurred by you, your Owners and/or your managers in attending these programs.
- 5.4 **Annual Conference.** Each year during the term of this Agreement, you, a Principal Owner and/or your Operating Manager must attend our Annual Conference for franchisees if we hold such a conference. We may charge you a fee to attend the conference ("Annual Conference Registration Fee"). In addition, you are responsible for all travel expenses incurred by you, your Owners and/or Operating Manager in attending the conference. This provision does not obligate us to hold an Annual Conference of franchisees each year. If an Annual Conference is not held, you are not obligated to pay the Annual Conference Registration Fee. If you fail to attend any Annual Conference during the term of this Agreement, you remain obligated to pay the Annual Conference Registration Fee.

Question 12

What is the estimated total cost for an Aw franchisee to attend required conferences, considering travel and living costs in Item 7, any conference fees in Item 6, potential penalties for failing to attend, the frequency of required conferences, and the potential benefits of attending?

Accepted Answer

d by us. We may charge a tuition fee for any such training, seminars, meetings or webinars and you will be responsible for all expenses incurred by you, your Owners and/or your managers in attending these programs.
- 5.4 **Annual Conference.** Each year during the term of this Agreement, you, a Principal Owner and/or your Operating Manager must attend our Annual Conference for franchisees if we hold such a conference. We may charge you a fee to attend the conference ("Annual Conference Registration Fee"). In addition, you are responsible for all travel expenses incurred by you, your Owners and/or Operating Manager in attending the conference. This provision does not obligate us to hold an Annual Conference of franchisees each year. If an Annual Conference is not held, you are not obligated to pay the Annual Conference Registration Fee. If you fail to attend any Annual Conference during the term of this Agreement, you remain obligated to pay the Annual Conference Registration Fee. We may require you to attend separate training, in addition to any other rights and remedies available to us, for your breach of this provision.

#### 6. **OPERATING ASSISTANCE;

Question 13

What is the estimated total cost for an Aw franchisee to attend required conferences, considering travel and living costs in Item 7, any conference fees in Item 6, potential penalties for failing to attend, the frequency of required conferences, the potential benefits of attending, and the long-term impact on business performance?

Accepted Answer

r Premises on or around the date of the opening of your Papa Ray's Pizza Restaurant to provide on-site assistance and training to you, your Owners, your manager and employees and to assist you in opening your Papa Ray's Pizza Restaurant.
- 5.3 **Supplemental Education.** We may from time to time provide, and may require, that you, your Owners and/or managers attend and successfully complete supplemental training, seminars, regional franchise meetings or webinars to be conducted at times and locations designated by us. We may charge a tuition fee for any such training, seminars, meetings or webinars and you will be responsible for all expenses incurred by you, your Owners and/or your managers in attending these programs.
- 5.4 **Annual Conference.** Each year during the term of this Agreement, you, a Principal Owner and/or your Operating Manager must attend our Annual Conference for franchisees if we hold such a conference. We may charge you a fee to attend the conference ("Annual Conference Registration Fee"). In addition, you are responsible for all travel expenses incurred by you, your Owners and/or Operating Manager in attending the conference. This provision does not obligate us to hold an Annual Conference of franchisees each year. If an Annual Conference is not held, you are not obligated to pay the Annual Conference Registration Fee. If you fail to attend any Annual Conference during the term of this Agreement, you remain obligated to pay the Annual Conference Registration Fee. We may require you to attend separate training, in addition to any other rights and remedies available to us, for your breach of this provision.

#### 6. **OPERATING ASSISTANCE;

Question 14

What is the estimated total cost for an Aw franchisee to attend required conferences, considering travel and living costs in Item 7, any conference fees in Item 6, potential penalties for failing to attend, the frequency of required conferences, the potential benefits of attending, the long-term impact on business performance, and the overall professional development opportunities?

Accepted Answer

d by us. We may charge a tuition fee for any such training, seminars, meetings or webinars and you will be responsible for all expenses incurred by you, your Owners and/or your managers in attending these programs.
- 5.4 **Annual Conference.** Each year during the term of this Agreement, you, a Principal Owner and/or your Operating Manager must attend our Annual Conference for franchisees if we hold such a conference. We may charge you a fee to attend the conference ("Annual Conference Registration Fee"). In addition, you are responsible for all travel expenses incurred by you, your Owners and/or Operating Manager in attending the conference. This provision does not obligate us to hold an Annual Conference of franchisees each year. If an Annual Conference is not held, you are not obligated to pay the Annual Conference Registration Fee. If you fail to attend any Annual Conference during the term of this Agreement, you remain obligated to pay the Annual Conference Registration Fee. We may require you to attend separate training, in addition to any other rights and remedies available to us, for your breach of this provision.

#### 6. **OPERATING ASSISTANCE;

Question 15

What is the estimated total cost for an Aw franchisee to attend required conferences, considering travel and living costs in Item 7, any conference fees in Item 6, potential penalties for failing to attend, the frequency of required conferences, the potential benefits of attending, the long-term impact on business performance, the overall professional development opportunities, and the overall networking potential?

Accepted Answer

Each year during the term of this Agreement, you, a Principal Owner and/or your Operating Manager must attend our Annual Conference for franchisees if we hold such a conference. We may charge you a fee to attend the conference ("Annual Conference Registration Fee"). In addition, you are responsible for all travel expenses incurred by you, your Owners and/or Operating Manager in attending the conference. This provision does not obligate us to hold an Annual Conference of franchisees each year. If an Annual Conference is not held, you are not obligated to pay the Annual Conference Registration Fee. If you fail to attend any Annual Conference during the term of this Agreement, you remain obligated to pay the Annual Conference Registration Fee.

Question 16

How does the initial franchise fee for Aw, as detailed in Item 5, relate to the total estimated initial investment outlined in Item 7?

Accepted Answer

ITIAL INVESTMENT**

| Type of Expenditure | Amount- Range Estimated | Method of Payment | When Payable | To Whom Payment is Made |
|---|---|---|---|---|
| Initial Franchise Fee (Note 1) | $30,000 | 2 lump sum payments | ½ when you sign the franchise agreement; and ½ when we approve your location | Us |
| Travel and Living Costs while Training (Note 2) | $2,000 - $10,000 | As arranged | As agreed | Transportation lines, hotels, restaurants |
| Lease Security Deposit and Rent (1st 3 months) (Note 3) | $4,000 - $16,000 | As arranged | As arranged | Lessor |
| Leasehold Improvements | $30,000 - | As incurred | As agreed | Contractors |
| (Note 4) | $60,000 |  |  |  |
| Equipment/ Signage/ Furniture/Fixtures (Note 5) | $57,500 - $143,750 | As incurred | As agreed | Approved Suppliers |
| POS Computer Systems | $12,330 - | As incurred | As agreed | Designated |
| (Note 6) | $25,330 |  |  | Suppliers |
| Initial Inventory and Supplies (Note 7) | $10,000 - $19,000 | As incurred | As agreed | Designated and Approved Suppliers, including Us |
| Utility Deposits | $2,000 - $4,000 | As incurred | As arranged | Municipalities |
| Insurance (Note 8) | $900 – $16,000 | As incurred | As arranged | Insurance company |
| Miscellaneous Pre – Opening Expenses (Note 9) | $10,000 - $30,000 | As incurred | As incurred | Licensing agencies; Professional advisors |
| Grand Opening | $15,000 - | As incurred | During the 90 | Suppliers |
| Advertising (Note 10) | $30,000 |  | days after opening |  |
| Additional Funds (1st 3 | $40,000 - | As incurred | As incurred | You determine |
| months) (Note 11) | $80,000 |  |  |  |
| TOTAL ESTIMATED INITIAL INVESTMENT | $213,730 – $464,080 |  |  |  |![](_page_16_Picture_0.jpeg)

#### Explanatory Notes:

This is our estimate of the costs you will incur to develop and open a Papa Ray's Pizza Restaurant. The factors that underlie this estimate can vary considerably depending on a number of variables, and the actual investment you may make in developing and opening your Papa Ray's Pizza Restaurant may be less or greater than the estimates given. Payments to us are non-refundable. Payments to third parties are not expected to be refundable unless you directly negotiate this with a supplier.

- 1. **Initial Franchise Fee.** One-half of the initial franchise fee is paid to us when you sign the Franchise Agreement and the balance of the initial franchise fee is paid within 5 days of the date we approve the site for your Papa Ray's Pizza Restaurant. See Item 5 for a description of certain discounts available on the initial franchise fee.
- 2. **Training Expenses**.

Question 17

How does the initial franchise fee for Aw in Item 5 compare to the potential transfer fee in Item 6 if the franchisee decides to sell the franchise?

Accepted Answer

[Item 5: INITIAL FEES]

#### **Item 5 INITIAL FEES**

You must pay an initial franchise fee of $30,000. It is due and payable in a lump sum by certified or cashier's check upon signing the Franchise Agreement. The franchise fee is not refundable under any circumstances.

The following franchisees will pay a discounted initial franchise fee of $15,000:

- (1) an existing Papa Ray's Pizza Restaurant franchisee currently operating a Papa Ray's Pizza Restaurant in compliance with the franchise agreement;
  - (2) a honorably discharged Veteran;
- (3) a current or past employee of ours, an affiliate or one of our franchisees who was so employed for a minimum of one year.

The $15,000 non-refundable initial franchise fee must be paid in cash in full when the franchise agreement is signed.

*The remainder of this page has been left blank intentionally.*

![](_page_12_Picture_0.jpeg)

[Item 6: OTHER FEES]

| TYPE OF FEE1,3 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
|  | conference. |  | conference, and if you fail to do so, the conference fee must still be paid to us. You are responsible for your travel expenses. |
| Transfer Fee | $9,000 or $5,000 if the transferee is an existing franchisee approved by us for additional franchises. | Before transfer | Payable when you transfer the franchise, an interest in Papa Ray’s Pizza Restaurant, the assets of Papa Ray’s Pizza Restaurant or an interest in the franchisee; no fee if the transfer is to a corporation owned by you. |

Question 18

How does the initial franchise fee for Aw in Item 5 compare to the potential transfer fee in Item 6, specifically for an existing franchisee transferring to an additional franchise?

Accepted Answer

ITIAL FEES**

You must pay an initial franchise fee of \$30,000. It is due and payable in a lump sum by certified or cashier's check upon signing the Franchise Agreement. The franchise fee is not refundable under any circumstances.

The following franchisees will pay a discounted initial franchise fee of \$15,000:

- (1) an existing Papa Ray's Pizza Restaurant franchisee currently operating a Papa Ray's Pizza Restaurant in compliance with the franchise agreement;
  - (2) a honorably discharged Veteran;
- (3) a current or past employee of ours, an affiliate or one of our franchisees who was so employed for a minimum of one year.

The \$15,000 non-refundable initial franchise fee must be paid in cash in full when the franchise agreement is signed.

*The remainder of this page has been left blank intentionally.*

![](_page_12_Picture_0.jpeg)

#### **Item 6 OTHER FEES**

| TYPE OF FEE1,3 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
|  | conference. |  | conference, and if you fail to do so, the conference fee must still be paid to us. You are responsible for your travel expenses.

Question 19

How does the initial franchise fee for Aw in Item 5 compare to the potential transfer fee in Item 6, specifically for an existing franchisee transferring to an additional franchise, considering any potential discounts or waivers?

Accepted Answer

[Item 6: OTHER FEES]

| TYPE OF FEE1,3 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
|  | conference. |  | conference, and if you fail to do so, the conference fee must still be paid to us. You are responsible for your travel expenses. |
| Transfer Fee | $9,000 or $5,000 if the transferee is an existing franchisee approved by us for additional franchises. | Before transfer | Payable when you transfer the franchise, an interest in Papa Ray’s Pizza Restaurant, the assets of Papa Ray’s Pizza Restaurant or an interest in the franchisee; no fee if the transfer is to a corporation owned by you. |

[Item 5: INITIAL FEES]

You must pay an initial franchise fee of $30,000. It is due and payable in a lump sum by certified or cashier's check upon signing the Franchise Agreement. The franchise fee is not refundable under any circumstances.

The following franchisees will pay a discounted initial franchise fee of $15,000:

- (1) an existing Papa Ray's Pizza Restaurant franchisee currently operating a Papa Ray's Pizza Restaurant in compliance with the franchise agreement;

Question 20

How does the initial franchise fee for Aw in Item 5 compare to the potential transfer fee in Item 6, specifically for an existing franchisee transferring to an additional franchise, considering any potential discounts or waivers and the value of the franchise at the time of transfer?

Accepted Answer

[Item 5: INITIAL FEES]

You must pay an initial franchise fee of $30,000. It is due and payable in a lump sum by certified or cashier's check upon signing the Franchise Agreement. The franchise fee is not refundable under any circumstances.

The following franchisees will pay a discounted initial franchise fee of $15,000:

- (1) an existing Papa Ray's Pizza Restaurant franchisee currently operating a Papa Ray's Pizza Restaurant in compliance with the franchise agreement;
  - (2) a honorably discharged Veteran;
- (3) a current or past employee of ours, an affiliate or one of our franchisees who was so employed for a minimum of one year.

The $15,000 non-refundable initial franchise fee must be paid in cash in full when the franchise agreement is signed.

[Item 6: OTHER FEES]

| TYPE OF FEE1,3 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Transfer Fee | $9,000 or $5,000 if the transferee is an existing franchisee approved by us for additional franchises. | Before transfer | Payable when you transfer the franchise, an interest in Papa Ray’s Pizza Restaurant, the assets of Papa Ray’s Pizza Restaurant or an interest in the franchisee; no fee if the transfer is to a corporation owned by you.

Question 21

How does the initial franchise fee for Aw in Item 5 compare to the potential transfer fee in Item 6, specifically for an existing franchisee transferring to an additional franchise, considering any potential discounts or waivers, the value of the franchise at the time of transfer, and the potential for appreciation?

Accepted Answer

[Item 5: INITIAL FEES]

You must pay an initial franchise fee of $30,000. It is due and payable in a lump sum by certified or cashier's check upon signing the Franchise Agreement. The franchise fee is not refundable under any circumstances.

The following franchisees will pay a discounted initial franchise fee of $15,000:

- (1) an existing Papa Ray's Pizza Restaurant franchisee currently operating a Papa Ray's Pizza Restaurant in compliance with the franchise agreement;
  - (2) a honorably discharged Veteran;
- (3) a current or past employee of ours, an affiliate or one of our franchisees who was so employed for a minimum of one year.

The $15,000 non-refundable initial franchise fee must be paid in cash in full when the franchise agreement is signed.

[Item 6: OTHER FEES]

| TYPE OF FEE1,3 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
|  | conference. |  | conference, and if you fail to do so, the conference fee must still be paid to us. You are responsible for your travel expenses. |
| Transfer Fee | $9,000 or $5,000 if the transferee is an existing franchisee approved by us for additional franchises. | Before transfer | Payable when you transfer the franchise, an interest in Papa Ray’s Pizza Restaurant, the assets of Papa Ray’s Pizza Restaurant or an interest in the franchisee; no fee if the transfer is to a corporation owned by you.

Question 22

How does the initial franchise fee for Aw in Item 5 compare to the potential transfer fee in Item 6, specifically for an existing franchisee transferring to an additional franchise, considering any potential discounts or waivers, the value of the franchise at the time of transfer, the potential for appreciation, and the overall return on investment?

Accepted Answer

6 OTHER FEES**

| TYPE OF FEE1,3 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
|  | conference. |  | conference, and if you fail to do so, the conference fee must still be paid to us. You are responsible for your travel expenses. |
| Transfer Fee | $9,000 or $5,000 if the transferee is an existing franchisee approved by us for additional franchises. | Before transfer | Payable when you transfer the franchise, an interest in Papa Ray’s Pizza Restaurant, the assets of Papa Ray’s Pizza Restaurant or an interest in the franchisee; no fee if the transfer is to a corporation owned by you. |
| Renewal Fee | $2,500 | When you sign renewal agreement | Payable if you renew your franchise at the end of the initial term. |
| Audit/Inspection Costs | Cost of audit or inspection, including charges of professional advisors, and travel expenses, room and board and compensation or fees of our employees or agents | Upon billing | Payable if audit necessary because of your failure to file reports, supporting records, financial statements, or other required information in a timely fashion or if any audit reveals an understatement of the reported Gross Sales of greater than 2%. |
| Service Charge | Greater of $150 or the highest interest rate allowed by law not to exceed 1 ½%. | Upon billing | Payable on all overdue accounts due to us. |
| Management Fee | Currently $250 per day, plus expenses;

Question 23

How does the initial franchise fee for Aw in Item 5 compare to the potential transfer fee in Item 6, specifically for an existing franchisee transferring to an additional franchise, considering any potential discounts or waivers, the value of the franchise at the time of transfer, the potential for appreciation, the overall return on investment, and the long-term financial implications?

Accepted Answer

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#### **Item 5 INITIAL FEES**

You must pay an initial franchise fee of \$30,000. It is due and payable in a lump sum by certified or cashier's check upon signing the Franchise Agreement. The franchise fee is not refundable under any circumstances.

The following franchisees will pay a discounted initial franchise fee of \$15,000:

- (1) an existing Papa Ray's Pizza Restaurant franchisee currently operating a Papa Ray's Pizza Restaurant in compliance with the franchise agreement;
  - (2) a honorably discharged Veteran;
- (3) a current or past employee of ours, an affiliate or one of our franchisees who was so employed for a minimum of one year.

The \$15,000 non-refundable initial franchise fee must be paid in cash in full when the franchise agreement is signed.

*The remainder of this page has been left blank intentionally.*

![](_page_12_Pic

Question 24

How does the initial franchise fee for Aw in Item 5 compare to the potential transfer fee in Item 6, specifically for an existing franchisee transferring to an additional franchise, considering any potential discounts or waivers, the value of the franchise at the time of transfer, the potential for appreciation, the overall return on investment, the long-term financial implications, and the overall wealth creation potential?

Accepted Answer

6 OTHER FEES**

| TYPE OF FEE1,3 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
|  | conference. |  | conference, and if you fail to do so, the conference fee must still be paid to us. You are responsible for your travel expenses. |
| Transfer Fee | $9,000 or $5,000 if the transferee is an existing franchisee approved by us for additional franchises. | Before transfer | Payable when you transfer the franchise, an interest in Papa Ray’s Pizza Restaurant, the assets of Papa Ray’s Pizza Restaurant or an interest in the franchisee; no fee if the transfer is to a corporation owned by you. |
| Renewal Fee | $2,500 | When you sign renewal agreement | Payable if you renew your franchise at the end of the initial term. |
| Audit/Inspection Costs | Cost of audit or inspection, including charges of professional advisors, and travel expenses, room and board and compensation or fees of our employees or agents | Upon billing | Payable if audit necessary because of your failure to file reports, supporting records, financial statements, or other required information in a timely fashion or if any audit reveals an understatement of the reported Gross Sales of greater than 2%. |
| Service Charge | Greater of $150 or the highest interest rate allowed by law not to exceed 1 ½%. | Upon billing | Payable on all overdue accounts due to us. |
| Management Fee | Currently $250 per day, plus expenses;

Question 25

What is the range of the estimated initial investment for travel and living costs during training for Aw, as stated in Item 7, and how does this relate to any required conference fees mentioned in Item 6?

Accepted Answer

ITIAL INVESTMENT**

| Type of Expenditure | Amount- Range Estimated | Method of Payment | When Payable | To Whom Payment is Made |
|---|---|---|---|---|
| Initial Franchise Fee (Note 1) | $30,000 | 2 lump sum payments | ½ when you sign the franchise agreement; and ½ when we approve your location | Us |
| Travel and Living Costs while Training (Note 2) | $2,000 - $10,000 | As arranged | As agreed | Transportation lines, hotels, restaurants |
| Lease Security Deposit and Rent (1st 3 months) (Note 3) | $4,000 - $16,000 | As arranged | As arranged | Lessor |
| Leasehold Improvements | $30,000 - | As incurred | As agreed | Contractors |
| (Note 4) | $60,000 |  |  |  |
| Equipment/ Signage/ Furniture/Fixtures (Note 5) | $57,500 - $143,750 | As incurred | As agreed | Approved Suppliers |
| POS Computer Systems | $12,330 - | As incurred | As agreed | Designated |
| (Note 6) | $25,330 |  |  | Suppliers |
| Initial Inventory and Supplies (Note 7) | $10,000 - $19,000 | As incurred | As agreed | Designated and Approved Suppliers, including Us |
| Utility Deposits | $2,000 - $4,000 | As incurred | As arranged | Municipalities |
| Insurance (Note 8) | $900 – $16,000 | As incurred | As arranged | Insurance company |
| Miscellaneous Pre – Opening Expenses (Note 9) | $10,000 - $30,000 | As incurred | As incurred | Licensing agencies; Professional advisors |
| Grand Opening | $15,000 - | As incurred | During the 90 | Suppliers |
| Advertising (Note 10) | $30,000 |  | days after opening |  |
| Additional Funds (1st 3 | $40,000 - | As incurred | As incurred | You determine |
| months) (Note 11) | $80,000 |  |  |  |
| TOTAL ESTIMATED INITIAL INVESTMENT | $213,730 – $464,080 |  |  |  |![](_page_16_Picture_0.jpeg)

#### Explanatory Notes:

This is our estimate of the costs you will incur to develop and open a Papa Ray's Pizza Restaurant. The factors that underlie this estimate can vary considerably depending on a number of variables, and the actual investment you may make in developing and opening your Papa Ray's Pizza Restaurant may be less or greater than the estimates given. Payments to us are non-refundable. Payments to third parties are not expected to be refundable unless you directly negotiate this with a supplier.

- 1. **Initial Franchise Fee.** One-half of the initial franchise fee is paid to us when you sign the Franchise Agreement and the balance of the initial franchise fee is paid within 5 days of the date we approve the site for your Papa Ray's Pizza Restaurant. See Item 5 for a description of certain discounts available on the initial franchise fee.
- 2. **Training Expenses**. We do not charge a fee for the initial training program for up to 2 owners and/or managers.

Question 26

What is the total range of the estimated initial investment for an Aw franchise, considering the initial franchise fee in Item 5 and the other expenditures listed in Item 7?

Accepted Answer

| Type of Expenditure | Amount- Range Estimated | Method of Payment | When Payable | To Whom Payment is Made |
|---|---|---|---|---|
| Initial Franchise Fee (Note 1) | $30,000 | 2 lump sum payments | ½ when you sign the franchise agreement; and ½ when we approve your location | Us |
| Travel and Living Costs while Training (Note 2) | $2,000 - $10,000 | As arranged | As agreed | Transportation lines, hotels, restaurants |
| Lease Security Deposit and Rent (1st 3 months) (Note 3) | $4,000 - $16,000 | As arranged | As arranged | Lessor |
| Leasehold Improvements | $30,000 - | As incurred | As agreed | Contractors |
| (Note 4) | $60,000 |  |  |  |
| Equipment/ Signage/ Furniture/Fixtures (Note 5) | $57,500 - $143,750 | As incurred | As agreed | Approved Suppliers |
| POS Computer Systems | $12,330 - | As incurred | As agreed | Designated |
| (Note 6) | $25,330 |  |  | Suppliers |
| Initial Inventory and Supplies (Note 7) | $10,000 - $19,000 | As incurred | As agreed | Designated and Approved Suppliers, including Us |
| Utility Deposits | $2,000 - $4,000 | As incurred | As arranged | Municipalities |
| Insurance (Note 8) | $900 – $16,000 | As incurred | As arranged | Insurance company |
| Miscellaneous Pre – Opening Expenses (Note 9) | $10,000 - $30,000 | As incurred | As incurred | Licensing agencies; Professional advisors |
| Grand Opening | $15,000 - | As incurred | During the 90 | Suppliers |
| Advertising (Note 10) | $30,000 |  | days after opening |  |
| Additional Funds (1st 3 | $40,000 - | As incurred | As incurred | You determine |
| months) (Note 11) | $80,000 |  |  |  |
| TOTAL ESTIMATED INITIAL INVESTMENT | $213,730 – $464,080 |  |  |  |

Question 27

How does the transfer fee for an Aw franchise in Item 6 compare to the initial franchise fee in Item 5?

Accepted Answer

| TYPE OF FEE1,3 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
|  | conference. |  | conference, and if you fail to do so, the conference fee must still be paid to us. You are responsible for your travel expenses. |
| Transfer Fee | $9,000 or $5,000 if the transferee is an existing franchisee approved by us for additional franchises. | Before transfer | Payable when you transfer the franchise, an interest in Papa Ray’s Pizza Restaurant, the assets of Papa Ray’s Pizza Restaurant or an interest in the franchisee; no fee if the transfer is to a corporation owned by you. |
| Renewal Fee | $2,500 | When you sign renewal agreement | Payable if you renew your franchise at the end of the initial term. |

Question 28

What is the trend in the number of Aw franchised outlets in Illinois from 2022 to 2024?

Accepted Answer

| State | Year | Outlets at Start of Year | Outlets Opened | Terminations | Non- Renewals | Reacquired by Franchisor | Ceased Operations Other Reasons | Outlets at End of the Year |
|---|---|---|---|---|---|---|---|---|
| Illinois | 2022 | 4 | 2 | 0 | 0 | 0 | 1 | 5 |
|  | 2023 | 5 | 0 | 0 | 0 | 0 | 0 | 5 |
|  | 2024 | 5 | 0 | 0 | 0 | 0 | 2 | 3 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 37–39)

Question 29

What form must the confidentiality agreement signed by my managers and employees take to be approved by Aw?

Accepted Answer

You may not use our confidential information (as defined in the Franchise Agreement) in any unauthorized manner. You must take reasonable steps to prevent disclosure of our confidential information to others, including having your managers and employees sign a confidentiality agreement. All of your managers and other employees who attend our training programs, seminars or conferences and/or have access to the confidential information must maintain the confidentiality of that information and sign a confidentiality agreement in a form approved by us. You must provide us with copies of the signed confidentiality agreements before the manager or employees receives training.

Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD page 32)

Question 30

What happens if I don't provide Aw with copies of signed confidentiality agreements before training?

Accepted Answer

You may not use our confidential information (as defined in the Franchise Agreement) in any unauthorized manner. You must take reasonable steps to prevent disclosure of our confidential information to others, including having your managers and employees sign a confidentiality agreement. All of your managers and other employees who attend our training programs, seminars or conferences and/or have access to the confidential information must maintain the confidentiality of that information and sign a confidentiality agreement in a form approved by us. You must provide us with copies of the signed confidentiality agreements before the manager or employees receives training.

Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD page 32)

Question 31

What happens if my managers or employees have access to Aw's confidential information but do not sign a confidentiality agreement?

Accepted Answer

responding intellectual property rights are assigned to us.

You may not use our confidential information (as defined in the Franchise Agreement) in any unauthorized manner. You must take reasonable steps to prevent disclosure of our confidential information to others, including having your managers and employees sign a confidentiality agreement. All of your managers and other employees who attend our training programs, seminars or conferences and/or have access to the confidential information must maintain the confidentiality of that information and sign a confidentiality agreement in a form approved by us. You must provide us with copies of the signed confidentiality agreements before the manager or employees receives training.

There are currently no effective determinations of the Copyright Office (Library of Congress) or any court regarding any of the copyrighted materials. There are no agreements currently in effect which significantly limit our right to use or license the use of any copyrighted materials.

Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD page 32)

Question 32

Is there a specific form required for the confidentiality agreement that my managers and employees must sign for Aw?

Accepted Answer

Under the Franchise Agreement, you are not required to personally supervise the operations of your Papa Ray's Pizza Restaurant; however, your Papa Ray's Pizza Restaurant must at all times be under the direct, day-to-day, full-time, supervision of either you or, if you are an entity, an approved Owner who has satisfactorily completed our initial training program, or a manager who has satisfactorily completed our training program. If a manager supervises your Papa Ray's Pizza Restaurant, you or your approved Owner must remain active in overseeing the operations of your Papa Ray's Pizza Restaurant conducted under the supervision of the manager. The manager of your Papa Ray's Pizza Restaurant does not need to have an equity interest in your Papa Ray's Pizza

![](_page_32_Picture_0.jpeg)

Restaurant but, must maintain the confidentiality of any of our confidential information to which he or she has access and managers must sign an agreement to maintain said confidentiality in a form approved by us.

Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD page 32)

Question 33

According to the amendment, under what condition is Section 18.4 of the Aw Franchise Agreement void?

Accepted Answer

|    | , 20, between Rayyan Pizza Franchise LLC, (Company) and                                                                                                                                                                                |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    | (Franchisee) to amend said Franchise Agreement to                                                                                                                                                                                      |
|    | include the following language:                                                                                                                                                                                                        |
|  | 1. Section 18.4. of the Franchise Agreement on "Governing Law/Consent to Jurisdiction" is amended |
|  | by adding the following: |
|  | This provision is void with respect to any cause of action which otherwise is enforceable in |
|  | Illinois pursuant to Section 4 of the Illinois Franchise Disclosure Act. |
|  | Notwithstanding the foregoing, claims arising under the Illinois Franchise Disclosure Act of |
|  | 1987 shall be brought in any court in the state of Illinois with subject matter and personal |
|  | jurisdiction in the particular matter. |

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 34

According to Aw's financial statements, what action would trigger a requirement for further adjustment or disclosure?

Accepted Answer

#### **7. SUBSEQUENT EVENTS**

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or nonrecognized subsequent events that would have required further adjustment or disclosure in the financial statements. Subsequent events were evaluated though April 10, 2025, the time at which the financial statements were available to be issued.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 39)

Question 35

According to the Aw franchise agreement, what is the effect of accepting payments from the franchisee after a breach of the agreement, and what rights are affected?

Accepted Answer

Neither you nor the Company will be deemed to have waived or impaired any right, power or option reserved by this Agreement (including, without limitation, the right to demand exact compliance with every term, condition and covenant herein, or to declare any breach thereof to be a default and to terminate the Franchise prior to the expiration of its terms), by virtue of: (1) any custom or practice of the parties at variance with the terms hereof; (2) any failure, refusal or neglect of either of us to exercise any right under this Agreement or to insist upon exact compliance by the other with its obligations hereunder, including, without limitation, any mandatory specification, standard or operating procedure; (3) any waiver, forbearance, delay, failure or omission by us to exercise any

![](_page_86_Picture_0.jpeg)

right, power or option, whether of the same, similar or different nature, with respect to other Papa Ray's Pizza Restaurants; or (4) the acceptance by us of any payments due from you after any breach of this Agreement.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 36

According to the Aw franchise agreement, what is the effect of a waiver granted by Aw on other rights Aw may have?

Accepted Answer

Either you or the Company may, by written instrument, unilaterally waive or reduce any obligation of or restriction upon the other under this Agreement, effective upon delivery of written notice thereof to the other or such other effective date stated in the notice of waiver. Any waiver granted by us will be without prejudice to any other rights we may have, will be subject to our continuing review, and may be revoked, in our sole discretion, at any time and for any reason, effective upon delivery to you of ten (10) days prior written notice.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 37

According to the Aw franchise agreement, what happens if the agreement is not in force and effect?

Accepted Answer

As long as this Agreement is in force and effect and you are not in default under any of the terms of this Agreement, we will not establish another Papa Ray's Pizza Restaurant franchise or operate itself or through an affiliate any other Papa Ray's Pizza Restaurant within the protected area described in Exhibit 1 ("Protected Area").

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 38

According to the Aw franchise agreement, what happens if the franchisee defaults on the agreement terms regarding the protected area?

Accepted Answer

15.3 **Right to Operate Upon Default.** In addition to our right to terminate this Agreement and not in lieu of such right or any other rights, in the event that you have not cured a default under this Agreement within fourteen (14) days after receipt of a written notice of default, we may, at our option, enter upon the Premises and exercise complete authority with respect to the operation of your Papa Ray's Pizza Restaurant until such time as we determine that the default has been cured and that there is compliance with the requirements of this Agreement. You acknowledge and agree that our agent or other representative designated by us may take over, control and operate your Papa Ray's Pizza Restaurant, that you shall pay us the then-current published fee for such management service, plus all travel expenses, room and board and other expenses reasonably incurred by such agent or representative so long as it shall be required to enforce compliance with this Agreement. You further acknowledge that if we temporarily operate your Papa Ray's Pizza Restaurant for you under this Paragraph 15.4, you will indemnify and hold harmless us and our agent or representative respecting any and all claims arising out of our operation of your Papa Ray's Pizza Restaurant under this Paragraph 15.4. Nothing herein shall require us to operate your Papa Ray's Pizza Restaurant when you are in default.

#### **16. RIGHTS OF THE COMPANY AND OBLIGATIONS OF FRANCHISEE UPON TERMINATION OR EXPIRATION OF THE FRANCHISE.**

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 39

According to the Aw franchise agreement, what is the impact of a modification to a specification, standard, or operating procedure on the other terms of the agreement, and what is the scope of this impact?

Accepted Answer

If any lawful requirement or court order of any jurisdiction: (1) requires a greater advance notice of the termination or non-renewal of this Agreement than is required under this Agreement, or the taking of some other action which is not required by this Agreement; or (2) makes any provision of this Agreement or any specification, standard or operating procedure we prescribed invalid or unenforceable, the advance notice and/or other action required or revision of the specification, standard or operating procedure will be substituted for the comparable provisions of this Agreement in order to make the modified provision enforceable to the greatest extent possible. You agree to be bound by the modification to the greatest extent lawfully permitted. No modification will impact the operation of, or have any other effect upon, any other terms, provisions, and/or covenants of this Agreement.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 40

According to the Aw franchise agreement, how are references to different genders or singular/plural forms interpreted, and what is the condition for this interpretation?

Accepted Answer

All references in this Agreement to masculine, neuter or singular usage will be construed to include the masculine, feminine, neuter or plural, wherever applicable.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 41

According to the Aw franchise agreement, can Aw revoke a waiver at any time, and what are the conditions for this revocation?

Accepted Answer

- 19.3 **Waiver of Obligations.** Either you or the Company may, by written instrument, unilaterally waive or reduce any obligation of or restriction upon the other under this Agreement, effective upon delivery of written notice thereof to the other or such other effective date stated in the notice of waiver. Any waiver granted by us will be without prejudice to any other rights we may have, will be subject to our continuing review, and may be revoked, in our sole discretion, at any time and for any reason, effective upon delivery to you of ten (10) days prior written notice.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 42

According to the Aw franchise agreement, what is substituted for comparable provisions if a lawful requirement makes a specification, standard, or operating procedure invalid?

Accepted Answer

If any lawful requirement or court order of any jurisdiction: (1) requires a greater advance notice of the termination or non-renewal of this Agreement than is required under this Agreement, or the taking of some other action which is not required by this Agreement; or (2) makes any provision of this Agreement or any specification, standard or operating procedure we prescribed invalid or unenforceable, the advance notice and/or other action required or revision of the specification, standard or operating procedure will be substituted for the comparable provisions of this Agreement in order to make the modified provision enforceable to the greatest extent possible. You agree to be bound by the modification to the greatest extent lawfully permitted. No modification will impact the operation of, or have any other effect upon, any other terms, provisions, and/or covenants of this Agreement.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 43

According to Aw, what happens if a franchisee does not meet all obligations under Paragraphs 4.1 through 4.5 before opening a Papa Ray's Pizza Restaurant?

Accepted Answer

You agree not to open the Papa Ray's Pizza Restaurant for business until: (1) all of your obligations under Paragraphs 4.1 through 4.5 of this Section 4 have been fulfilled; (2) we determine that the Papa Ray's Pizza Restaurant has been constructed, decorated, furnished, equipped, and stocked, with furniture, fixtures, equipment, inventory, materials and supplies in accordance with plans and specifications we have approved; (3) you and your Owners and any Operating Manager complete all initial training required by this Agreement and have provided pre-opening training to all of your employees to our satisfaction; (4) the initial franchise fee has been paid in full; and (5) you have furnished us with copies of all insurance policies required by Paragraph 11.12 of this Agreement.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 44

According to Aw, what happens if the franchisee does not open their Papa Ray's Pizza Restaurant within twelve (12) months of the Agreement Date?

Accepted Answer

You must have met the foregoing requirements and opened your Papa Ray's Pizza Restaurant within twelve (12) months of the Agreement Date.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 45

According to Aw, what happens if the franchisee does not provide pre-opening training to all of their employees to Aw's satisfaction before opening a Papa Ray's Pizza Restaurant?

Accepted Answer

You agree not to open the Papa Ray's Pizza Restaurant for business until: (1) all of your obligations under Paragraphs 4.1 through 4.5 of this Section 4 have been fulfilled; (2) we determine that the Papa Ray's Pizza Restaurant has been constructed, decorated, furnished, equipped, and stocked, with furniture, fixtures, equipment, inventory, materials and supplies in accordance with plans and specifications we have approved; (3) you and your Owners and any Operating Manager complete all initial training required by this Agreement and have provided pre-opening training to all of your employees to our satisfaction; (4) the initial franchise fee has been paid in full; and (5) you have furnished us with copies of all insurance policies required by Paragraph 11.12 of this Agreement.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 46

According to Aw, what happens if the franchisee does not purchase and install all required fixtures, furniture, equipment, and signs for the Papa Ray's Pizza Restaurant?

Accepted Answer

You agree not to open the Papa Ray's Pizza Restaurant for business until: (1) all of your obligations under Paragraphs 4.1 through 4.5 of this Section 4 have been fulfilled; (2) we determine that the Papa Ray's Pizza Restaurant has been constructed, decorated, furnished, equipped, and stocked, with furniture, fixtures, equipment, inventory, materials and supplies in accordance with plans and specifications we have approved; (3) you and your Owners and any Operating Manager complete all initial training required by this Agreement and have provided pre-opening training to all of your employees to our satisfaction; (4) the initial franchise fee has been paid in full; and (5) you have furnished us with copies of all insurance policies required by Paragraph 11.12 of this Agreement.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 47

According to Aw, what happens if the franchisee does not purchase an opening inventory of required products, and supplies for the Papa Ray's Pizza Restaurant?

Accepted Answer

You agree not to open the Papa Ray's Pizza Restaurant for business until: (1) all of your obligations under Paragraphs 4.1 through 4.5 of this Section 4 have been fulfilled; (2) we determine that the Papa Ray's Pizza Restaurant has been constructed, decorated, furnished, equipped, and stocked, with furniture, fixtures, equipment, inventory, materials and supplies in accordance with plans and specifications we have approved; (3) you and your Owners and any Operating Manager complete all initial training required by this Agreement and have provided pre-opening training to all of your employees to our satisfaction; (4) the initial franchise fee has been paid in full; and (5) you have furnished us with copies of all insurance policies required by Paragraph 11.12 of this Agreement.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 48

Does the Aw addendum for Illinois alter the requirement for the franchisee to commence doing business before the initial franchise fee is due?

Accepted Answer

Payment of the Initial Franchise Fee will be deferred until Franchisor has met its initial obligations to franchisee, and franchisee has commenced doing business. This financial assurance requirement was imposed by the Office of the Illinois Attorney General due to Franchisor's financial condition.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 49

Can Aw adjust or eliminate portions of the initial training program for a Papa Ray's Pizza Restaurant?

Accepted Answer

Before your Papa Ray's Pizza Restaurant opens, you and any operating manager must attend and complete to our satisfaction, an initial training program on the operation of a Papa Ray's Pizza Restaurant, which currently lasts 24 days (6 days a week for 4 weeks). The initial training program will be at a restaurant owned by our affiliate in Chicago or other location determined by us. Certain portions of the initial training program may be adjusted or eliminated by us in our discretion based on your skills and experience. We expect to conduct initial training classes as needed. Although we do not charge a fee for the initial training program for up to 2 people, you will be responsible for all compensation, travel, lodging and other living expenses incurred by you and any manager attending training.

If, we determine during a training program that you (or your approved Owner) are not qualified to manage a Papa Ray's Pizza Restaurant, we can require you to attend and successfully

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 22–29)

Question 50

Does Aw allow me to use ideas, inventions, formulas, concepts, methods, techniques or improvements relating to the Papa Ray's Pizza Restaurant that I develop?

Accepted Answer

In addition, in the course of the operation of the Papa Ray's Pizza Restaurant, and for six (6) months after the termination or expiration of this Agreement, you or your employees may develop ideas, inventions, formulas, concepts, methods, techniques or improvements relating to the Papa Ray's Pizza Restaurant, which you agree to disclose to us and which we may then authorize you to use in the operation of the Papa Ray's Pizza Restaurant. You agree that any corresponding intellectual property rights (including without limitation any rights in utility or design patents, know-how, trade secrets, trademarks, services marks and copyrights) in such ideas, inventions, formulas, concepts, methods, techniques or improvements will be our property and the title and rights to which shall be legally assigned to us immediately in writing by you, your Owners, your managers and/or employees. All of such information developed by you or your employees will be included in the term "Confidential Information," as defined above.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 51

Does the Assignee have any liability or obligation arising from the Aw franchise lease assignment?

Accepted Answer

#### **EXHIBIT 4 TO THE FRANCHISE AGREEMENT**

#### **CONDITIONAL ASSIGNMENT OF TELEPHONE NUMBERS AND SOCIAL MEDIA ACCOUNTS**

| Franchisee (Assignor):, whose business address is, in consideration of the granting of a franchise to Assignor contemporaneously herewith, and other valuable consideration paid by Rayyan Pizza Franchise, LLC, an Illinois limited liability company (Franchisor/Assignee), hereby assigns unto the Assignee (i) all telephone numbers and listings utilized by Assignor in the operation of Assignor's PAPA RAY'S PIZZA restaurant at Assignor's address above-referenced and (ii) all accounts with social media platforms or networks, including passwords and log-in information. WINGS" and the associated marks are solely the property of Franchisor/Assignee. Assignor's right to use any telephone numbers and directory listings and social media accounts associated with "PAPA RAY'S PIZZA & WINGS" trademarks and service marks was solely due to a limited license granted by Assignee/Franchisor in connection with the Assignee/Franchisor's trademark(s)/service mark(s) pursuant to a Franchise Agreement. Once said license has expired and/or terminated pursuant to the expiration or termination of the Franchise Agreement, Assignor has no right to the telephone number or directory listing or social media accounts associated with the Assignee/Franchisor's trademark, including, but not limited to PAPA RAY'S PIZZA & WINGS. | Assignor acknowledges that "PAPA RAY'S PIZZA & As such,         |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------|
| This Assignment shall constitute authorization to the appropriate telephone company to change |  |
| and transfer to Franchisor/Assignee all of Assignor's rights in and to the use of said business |  |
| telephone lines to the appropriate social media companies to change and transfer to |  |
| Franchisor/Assignee all of Assignor's rights in and to the use of said social media account, and |  |
| Assignor hereby irrevocably appoints and authorizes Franchisor/Assignee to act as Assignor's |  |
| attorney-in-fact and hereby empowers Franchisor/Assignee to execute such instruments in the |  |
| Assignee's name in order to give full effect to this Assignment and to effectuate any transfer. |  |
| Upon the Assignment, the Assignee hereby assumes the performance of all of the terms, covenants | if Assignee had originally been issued such social media accounts. |
| and conditions of the telephone company with respect to such telephones, telephone numbers and |  |
| telephone listings with the full force and effect as if the Assignee had been originally issued such |  |
| telephones, telephone numbers, telephone listings and the usage thereof and all of the terms, |  |
| covenants and conditions of the social media companies with respect to the social media accounts |  |
| with full force and effect as |  |
| ASSIGNOR (Franchisee): | ASSIGNEE (Franchisor): RAYYAN PIZZA FRANCHISE LLC |
| By: | By: |
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#### **Exhibit F**

#### **STATE ADDENDUM**

Some administrators of franchise registration states may require us to enter into an addendum to the Disclosure Document and/or the Franchise Agreement describing certain state laws or regulations which may supersede the Disclosure Document or Franchise Agreement. If you are in a registration state which requires an addendum, it will be found in this exhibit.

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#### **RAYYAN PIZZA FRANCHISE LLC ADDENDUM TO FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF ILLINOIS**

The Rayyan Pizza Franchise LLC Franchise Disclosure Document for use in the State of Illinois is modified in accordance with the following:

Illinois law shall apply to and govern the Franchise Agreement.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 52

Is attendance at the Aw Annual Conference mandatory?

Accepted Answer

s and locations designated by us. We may charge a tuition fee for any such training, seminars, meetings or webinars and you will be responsible for all expenses incurred by you, your Owners and/or your managers in attending these programs.
- 5.4 **Annual Conference.** Each year during the term of this Agreement, you, a Principal Owner and/or your Operating Manager must attend our Annual Conference for franchisees if we hold such a conference. We may charge you a fee to attend the conference ("Annual Conference Registration Fee"). In addition, you are responsible for all travel expenses incurred by you, your Owners and/or Operating Manager in attending the conference. This provision does not obligate us to hold an Annual Conference of franchisees each year. If an Annual Conference is not held, you are not obligated to pay the Annual Conference Registration Fee. If you fail to attend any Annual Conference during the term of this Agreement, you remain obligated to pay the Annual Conference Registration Fee. We may require you to attend separate training, in addition to any other rights and remedies available to us, for your breach of this provision.

#### 6. **OPERATING ASSISTANCE;

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 53

Besides the modifications in the addendum, what remains in effect for the Aw franchise agreement in Illinois?

Accepted Answer

Except as expressly modified hereby, the Franchise Agreement shall remain in full force and effect in accordance with its terms.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 54

Is a change in the character of the location sufficiently detrimental to the Store's business potential grounds for Aw Papa Ray's Pizza relocation approval?

Accepted Answer

be used in this grand opening program must be approved by us. You must provide us evidence of your grand opening advertising expenditures within one hundred twenty (120) days after the opening of the Papa Ray's Pizza Restaurant.

4.8 **Relocation**. You may operate your Papa Ray's Pizza Restaurant only at the Premises and you may not relocate your Papa Ray's Pizza Restaurant without our prior written approval. We will grant permission for relocation of your Papa Ray's Pizza Restaurant to a location approved by us if: (1) your lease for the Premises terminates through no fault of yours, (2) the Premises are damaged, condemned or otherwise rendered unusable, (3) in the judgment of both the Company and you, there is either a change in the character of the location of your Papa Ray's Pizza Restaurant sufficiently detrimental to its business potential to warrant its relocation, or the Premises is no longer suitable to meet the full business potential of your P

Source: Item 12 — TERRITORY (FDD pages 29–30)

Question 55

Is compliance with the Franchise Agreement a condition for avoiding additional guidance and assistance from Aw at a Papa Ray's Pizza Restaurant?

Accepted Answer

Upon your request and at our sole discretion, we will send a representative to your Papa Ray's Pizza Restaurant to provide additional guidance and assistance for a fee.

We may require this additional guidance and assistance if you are not operating your Papa Ray's Pizza Restaurant in compliance with the Franchise Agreement. (Franchise Agreement, Section 6.1)

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 22–29)

Question 56

What is the condition if the Aw franchisee is limited or prohibited by applicable law from paying all amounts owed to Aw?

Accepted Answer

- (g) except to the extent limited or prohibited by applicable law, you (and each of your Owners) must have executed a general release, in form satisfactory to us, of any and all claims against us and our affiliates, officers, directors, employees and agents;

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 57

What condition triggers the deferral of the initial franchise fee for Aw franchises in Illinois?

Accepted Answer

Payment of the Initial Franchise Fee will be deferred until Franchisor has met its initial obligations to franchisee, and franchisee has commenced doing business. This financial assurance requirement was imposed by the Office of the Illinois Attorney General due to Franchisor's financial condition.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 58

What conditions trigger the payment of the management fee to Aw?

Accepted Answer

| TYPE OF FEE1,3 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Management Fee | Currently $250 per day, plus expenses; subject to increase | As agreed | Payable to us during period that our appointed manager manages Papa Ray’s Pizza Restaurant, at our option, after 14 days from your receipt of a default notice or 30 days following your death or disability. |

Source: Item 6 — OTHER FEES (FDD pages 13–16)

Question 59

What are the conditions under which Aw franchisees must pay audit/inspection costs?

Accepted Answer

| TYPE OF FEE1,3 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Audit/Inspection Costs | Cost of audit or inspection, including charges of professional advisors, and travel expenses, room and board and compensation or fees of our employees or agents | Upon billing | Payable if audit necessary because of your failure to file reports, supporting records, financial statements, or other required information in a timely fashion or if any audit reveals an understatement of the reported Gross Sales of greater than 2%. |

Source: Item 6 — OTHER FEES (FDD pages 13–16)

Question 60

What is the consequence of not complying with the requirement to purchase from designated or approved suppliers for an Aw Papa Ray's Pizza Restaurant?

Accepted Answer

We do not provide any material benefits (for example, renewal or additional franchises) to franchisees based on the franchisee's use of designated or approved suppliers. However, you must comply with the requirements to purchase from designated or approved supplier to be in compliance with your franchise agreement.

The reputation and goodwill of Papa Ray's Pizza Restaurants will be based on, and can be maintained only by, the sale of high quality products and services and the presentation, packaging, service and sale of those products and services in an efficient and appealing manner. We have developed standards and specifications for various products, materials, equipment and supplies sold at or used in the operation of Papa Ray's Pizza Restaurants. You must operate your Papa Ray's Pizza Restaurant according to these standards. These standards and specifications may impose minimum requirements for product offerings, delivery, performance, design and appearance.

You must purchase ingredients and other food products, paper goods and packaging, uniforms, signs, direct mail marketing, and menu printing from suppliers approved by us. We are not an approved supplier of any of these items. Other equipment, furniture, fixtures, and other materials and supplies that you purchase for the establishment or operation of the Papa Ray's Pizza Restaurant must meet our standards and specifications. We will notify you in our Confidential Operations Manual (the "Operations Manual") or other communications of our standards and specifications and/or names of approved suppliers.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–21)

Question 61

What is the consequence if the franchisee provides false information to Aw in their application?

Accepted Answer

- (c) have made any material misrepresentation or omission in your application for the franchise rights conferred by this Agreement;

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 62

Is a court order an exception to the requirement to pay arbitration fees for Aw franchise?

Accepted Answer

In the event that any party fails without good cause (i) to appear at any properly noticed arbitration proceeding; or (ii) to make payment in full of its share of the required arbitration fees and costs within ten (10) days after notice and demand, absent a previously issued court order to the contrary, then the arbitrator or the organization/entity administering the arbitration shall be authorized to enter a final award against such party, notwithstanding the failure to appear or to make the required payment.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 63

Does the Aw covenant not to compete apply if the franchisee begins complying with the covenants at a later date than the effective date of assignment, termination, or expiration?

Accepted Answer

- 17.1 **Covenant Not To Compete.** Upon assignment, termination or expiration (without renewal) of this Agreement, you (and your Owners) agree that for a period of two (2) years, commencing on the effective date of assignment, termination or expiration, or the date on which you begin complying with the covenants herein, whichever is later, you (and your Owners) will not:
- (a) have any direct or indirect interest as an owner, investor, partner, director, officer, employee, consultant, representative or agent, or in any other capacity, in (a) any restaurant business selling products or services substantially similar to a Papa Ray's Pizza Restaurant concept then being offered by us (except other Papa Ray's Pizza Restaurants you are operating pursuant to franchise agreements with us), which is located (i) within ten (10) miles of the Premises of your Papa Ray's Pizza Restaurant or (i) within ten (10) miles of the premises of any other Papa Ray's Pizza Restaurant,

Source: Item 22 — CONTRACTS (FDD pages 39–40)

Question 64

Does any custom or practice of the parties at variance with the terms of the Aw franchise agreement constitute a waiver, and what is the effect of such variance?

Accepted Answer

other under this Agreement, effective upon delivery of written notice thereof to the other or such other effective date stated in the notice of waiver. Any waiver granted by us will be without prejudice to any other rights we may have, will be subject to our continuing review, and may be revoked, in our sole discretion, at any time and for any reason, effective upon delivery to you of ten (10) days prior written notice.

Neither you nor the Company will be deemed to have waived or impaired any right, power or option reserved by this Agreement (including, without limitation, the right to demand exact compliance with every term, condition and covenant herein, or to declare any breach thereof to be a default and to terminate the Franchise prior to the expiration of its terms), by virtue of: (1) any custom or practice of the parties at variance with the terms hereof;

Source: Item 22 — CONTRACTS (FDD pages 39–40)

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