Where are the covenants not to compete described for an Aw franchise?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| q. Non-competition covenants during the term of the franchise | Section 9.3 | No involvement in competing business anywhere. |
| r. Non-competition covenants after the franchise is terminated or expires | Section 17.1 | No involvement in a competing business for 2 years within 20 miles of your Papa Ray's Pizza Restaurant or of any other Papa Ray's Pizza Restaurant (same restrictions apply after assignment). |
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 32–33)
What This Means (2025 FDD)
According to the 2025 Aw Franchise Disclosure Document, non-competition covenants are detailed in two primary sections of the franchise agreement: Section 9.3, which covers in-term non-competition, and Section 17.1, which addresses post-term non-competition. These sections are further referenced in Item 17 of the FDD, which summarizes key provisions related to renewal, termination, transfer, and dispute resolution.
The in-term non-competition agreement, as outlined in Section 9.3, prevents franchisees and their owners from having any involvement with businesses offering similar products or services to Aw during the term of the franchise agreement. This includes owning, operating, or consulting with such businesses, or granting franchises or licenses for similar businesses. A limited exception exists for owning 5% or less of a publicly traded company. Additionally, franchisees are prohibited from diverting customers or hiring employees from Aw or its affiliates.
Post-term non-competition, detailed in Section 17.1, restricts franchisees (and their owners) for a period of two years after the termination, expiration, or assignment of the franchise agreement. During this period, they cannot have any interest in a restaurant business selling substantially similar products or services to Aw within ten miles of their former Aw location or any other Aw location. These restrictions aim to protect Aw's market and confidential information both during and after the franchise relationship.