What are the conditions under which an existing Papa Ray's Pizza Restaurant franchisee can receive a discounted initial franchise fee for Aw, as described in Item 5, and how does this relate to the transfer fee in Item 6 if they later transfer the franchise?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
[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.
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[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. |
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, an existing Papa Ray's Pizza Restaurant franchisee can receive a discounted initial franchise fee under specific conditions. The standard initial franchise fee is $30,000, but existing franchisees currently operating a Papa Ray's Pizza Restaurant in compliance with their franchise agreement are eligible for a discounted fee of $15,000. This represents a significant reduction in the upfront investment required to open an Aw franchise. The discounted initial franchise fee of $15,000 is non-refundable and must be paid in cash in full when the franchise agreement is signed.
If a franchisee who received this discounted initial fee later decides to transfer their Aw franchise, the transfer fee outlined in Item 6 comes into play. The standard transfer fee is $9,000. However, if the transferee is an existing franchisee approved by Aw for additional franchises, the transfer fee is reduced to $5,000. This implies that Aw encourages growth within its existing franchisee network by offering financial incentives for both initial expansion and subsequent transfers to qualified existing franchisees.
In summary, an existing Papa Ray's Pizza Restaurant franchisee in good standing pays a reduced initial franchise fee of $15,000 for a new Aw franchise. If they later transfer that franchise to another existing franchisee approved by Aw, the transfer fee is also reduced from $9,000 to $5,000. These fee reductions can lower the financial burden for existing franchisees looking to expand or transfer their business, while also incentivizing transfers to experienced operators already within the Aw system.