How is the 10-mile radius measured for the geographic restriction in the Aw post-term covenant not to compete?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, the franchisee and their owners agree not to have any direct or indirect interest in a restaurant business selling similar products or services to Aw's Papa Ray's Pizza concept. This restriction applies for two years, starting from the termination or expiration date, or the date of compliance with the covenant, whichever is later.
The geographic restriction extends to any such restaurant business located within ten miles of the franchisee's Papa Ray's Pizza Restaurant premises or within ten miles of any other Papa Ray's Pizza Restaurant. This means that the 10-mile radius is measured from the physical location of both the franchisee's former restaurant and any other Aw location.
This post-term covenant not to compete is designed to protect Aw's market and brand. Franchisees should be aware of these restrictions as they plan their future business ventures after leaving the Aw system, as the restrictions could significantly limit their options in the restaurant industry within a substantial area around their former location and other Aw locations.