What constitutes 'substantial compliance' with the agreement for Aw franchise renewal?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
another Papa Ray's Pizza Restaurant in the former Protected Area or (iii) terminate this Agreement upon delivery of written notice to you.
3. RENEWAL OF FRANCHISE
- 3.1 Franchisee's Right to Renew. Subject to the provisions of Paragraph 3.2 below, and if you have substantially complied with all provisions of this Agreement and any other agreement between us, then on expiration of the initial term of the Franchise, you will have the right to renew the Franchise for one (1) additional successive term of ten (10) years if: (1) you maintain possession of the Premises, or (2) you are unable to maintain possession of the Premises or in our judgment the Papa Ray's Pizza Restaurant should be relocated, and you secure an approved substitute premises and agree to expeditiously develop the substitute premises in compliance with specifications and standards then applicable under new or renewal franchises for Papa Ray's Pizza Restaurants. You and your Owners must also comply with our then-current training requirements and attend such training classes as we deem necessary. We will charge you a renewal fee of Two Thousand Five Hundred Dollars ($2,500.00) for services we render to you and expenses we incur in conjunction with the renewal.
- 3.2 Notice of Renewal and Nonrenewal. You must give us written notice of your election to exercise your option to renew at least nine (9) months before the end of the term of this Agreement. Within sixty (60) days of our receipt of your notice, we agree to give you written notice of any deficiencies in your operation or historical performance of the Papa Ray's Pizza Restaurant which could cause us not to renew the Franchise. Our notice will state what actions, if any, you must take to correct the deficiencies in your operation of the Papa Ray's Pizza Restaurant or of the Premises and will specify the time period in which those deficiencies must be corrected.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, a franchisee's right to renew their franchise for an additional ten-year term is contingent upon 'substantial compliance' with all provisions of the Franchise Agreement and any other agreements with Aw. This means the franchisee must have generally followed the rules and guidelines set forth in these agreements throughout the initial term of the franchise.
To initiate the renewal process, a franchisee must provide Aw with written notice of their intent to renew at least nine months before the expiration of the current agreement. Within 60 days of receiving this notice, Aw will inform the franchisee of any deficiencies in their operation or historical performance that could prevent renewal. This notice will outline the necessary actions and the timeframe for correcting these deficiencies.
Continued compliance with all terms and conditions of the Franchise Agreement is required up to the expiration date for the franchise to be renewed. Additionally, Aw requires the franchisee and their owners to sign the then-current form of the standard franchise agreement, ancillary agreements, and a general release of claims against Aw. The renewal agreement may contain different royalty fees, advertising fees, and other provisions than the original agreement. A renewal fee of $2,500.00 is charged for services rendered and expenses incurred by Aw in connection with the renewal.