What agreements may Aw require the assignee to execute and be bound by?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
utions, amounts for purchases and any other amounts owed to us or our affiliates which are then due and unpaid;
- (c) the assignee completes the initial training program required of new franchisees to our satisfaction;
- (d) if required, the lessor of the Premises has consented to your assignment or sublease of the Premises to the proposed assignee;
- (e) the assignee (and, if an entity, its direct or indirect owners) have, at our option, executed and agreed to be bound by either: (a) the form of franchise agreement, owner guarantees and such other ancillary agreements as are then customarily used by us in the grant of franchises for a Papa Ray's Pizza Restaurant, which may provide for royalty fees, marketing fund contributions and other fees and terms and conditions that differ from those contained in this Agreement; or (b) an assignment and assumption agreement satisfactory to us whereby the assignee assumes your obligations under this Agreement;
- (f) You or the assignee must have paid us a transfer fee of Nine Thousand Dollars ($9,000.00). In the event the assignee is an existing franchisee that we have approv
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, if a franchisee seeks to assign their franchise agreement, Aw has the option to require the assignee (the party taking over the franchise) to execute specific agreements. Aw can require the assignee to agree to be bound by either the current franchise agreement or Aw's then-current standard franchise agreement, owner guarantees, and other ancillary agreements. The new franchise agreement may include different royalty fees, marketing fund contributions, and other fees, terms, and conditions than the original agreement. Alternatively, Aw may require the assignee to sign an assignment and assumption agreement that is satisfactory to Aw, in which the assignee assumes all of the original franchisee's obligations under the existing agreement.
This means that a prospective Aw franchisee needs to understand that if they decide to sell their franchise, the person or entity buying it might have to agree to different terms than the original franchisee. These terms could involve higher fees or different operational requirements. This condition provides Aw with flexibility in adapting its franchise agreements to changing market conditions or business strategies, but it also introduces uncertainty for the franchisee looking to assign their franchise.
Furthermore, the FDD states that the franchisee or the assignee must pay Aw a transfer fee of $9,000. However, if the assignee is an existing franchisee approved for an additional franchise, the transfer fee is reduced to $5,000. Additionally, the original franchisee (and their owners) must execute a general release of any and all claims against Aw and its affiliates, officers, directors, employees, and agents, in a form satisfactory to Aw. These conditions ensure that Aw can resolve any potential disputes with the outgoing franchisee and maintain consistent standards across its franchise system.