What agreement's terms and conditions does the Aw franchise lease assignment secure?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.2 Lease of Premises. Any lease or sublease of the Premises must be approved by us before it is executed by you and we can require that certain terms and provisions be included in the lease or sublease.
At our option, we may require that the lease: (i) have a term, with initial and renewal terms, at least equal to the initial term of this Agreement; (ii) be collaterally assigned to us (with the consent of the lessor, if required), by execution of the Collateral Assignment of Lease attached hereto as Exhibit 3 (the assignment may be exercised only upon your default under the lease or this Agreement or the expiration or termination of this Agreement); (iii) provides that the lessor shall give written notice to us (concurrently with you) of any default by you under the lease, and will give us an additional fifteen (15) days to cure any default not cured by you during the cure period and assign the lease to us if defaults are cured by us; (iv) permits the use on the Premises of all signs required by the us for Papa Ray's Pizza Restaurants, subject to applicable local laws, codes and ordinances; (v) provides that on expiration or termination of your Franchise Agreement, we may enter the leased
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to the 2025 Aw Franchise Disclosure Document, the lease assignment is tied to the terms and conditions of the Franchise Agreement. Aw may require that any lease or sublease of the premises be approved before execution, and can mandate specific terms in the lease.
Specifically, Aw has the option to require that the lease: (i) has a term at least equal to the initial term of the Franchise Agreement; (ii) be collaterally assigned to Aw; (iii) stipulates that the lessor provide written notice to Aw of any franchisee default, allowing Aw an additional 15 days to cure the default; (iv) permits the use of all Aw-required signs on the premises; (v) allows Aw to enter the premises and remove identifying marks upon expiration or termination of the Franchise Agreement; (vi) restricts the premises' use solely to the operation of an Aw restaurant; and (vii) prevents the lessor from leasing other premises in the same shopping center to competing businesses.
This collateral assignment of lease, detailed in Exhibit 3, can be exercised if the franchisee defaults under the lease or the Franchise Agreement, or upon the expiration or termination of the Franchise Agreement. This ensures that Aw maintains control over the location and operation of the Papa Ray's Pizza Restaurant, even in situations where the franchisee is not fulfilling their obligations or the agreement has ended. This protects Aw's brand and operational standards.