Is ceasing operations for two or more days considered abandonment and a non-curable default for the Aw franchise?

According to Aw's 2025 Franchise Disclosure Document, ceasing operations for two or more days is considered abandonment and a non-curable default under the franchise agreement. Specifically, Item 17 details various provisions related to termination, and Section 15.1 defines "cause" for non-curable defaults. This means that if an Aw franchisee closes their Papa Ray's Pizza Restaurant for two or more days, Aw has grounds to terminate the franchise agreement without allowing the franchisee an opportunity to correct the issue.

This is a significant point for prospective franchisees to consider. Unlike some other defaults that can be cured with corrective action, this particular default leads to immediate termination. The FDD lists other actions that constitute a non-curable default, including failure to open the Papa Ray's Pizza Restaurant in the required time, failure to complete initial training satisfactorily, material misrepresentations, conviction of a felony, dishonest or unethical conduct, unauthorized transfers, unauthorized use or disclosure of confidential information or the Operations Manual, unauthorized use of Marks, having an interest in a competing business, creating a threat to public health or safety not corrected within 24 hours, three or more defaults in any 12-month period, failure to attend training or a conference two or more times, and filing for bankruptcy relief.

For a potential Aw franchisee, understanding these non-curable defaults is crucial. It highlights the importance of maintaining continuous operation of the Papa Ray's Pizza Restaurant, adhering to training requirements, and avoiding any actions that could be construed as dishonest or unethical. Franchisees should also be aware of the implications of bankruptcy and the restrictions on involvement with competing businesses. This information helps franchisees understand the severity of certain actions and the potential consequences for their franchise agreement.

It is important to note that the definition of abandonment and the enforcement of this clause can vary. A prospective franchisee should seek clarification from Aw regarding what circumstances might lead to a closure being considered abandonment. For example, closures due to natural disasters or mandatory government shutdowns might be treated differently. Understanding these nuances can help a franchisee better manage their business and avoid unintentional default.