What is the definition of 'Premises' in relation to Gross Revenue for an Aw franchise?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| The parties hereto agree that the Papa Ray's Pizza Restaurant to be operated by you pursuant to the Franchise Agreement shall be located at the following premises: | |
|---|---|
| (the "Premises"). | |
| Restaurant and any information communicated to you regarding the Premises for your Papa Ray's Pizza Restaurant do not constitute a representation or warranty of any kind, expressed or implied, as to the suitability of the Premises for a Papa Ray's Pizza Restaurant, of the economic terms of the lease, or for any other purpose. Our approval of Premises falls within the then-current acceptable criteria established by us as of the time period encompassing the evaluation. You and we acknowledge that application of criteria that have been effective with respect to other sites and premises may not be predictive of potential for all sites and premises and that, subsequent to our approval of a site and premises, demographic and/or economic factors, including competition from other businesses, included in or excluded from our criteria could change, thereby altering the potential of a site and premises. The uncertainty and instability of such criteria are beyond our control and you must agree that we will not be responsible for the failure of a site and premises approved by us to meet expectations as to potential revenue or operational criteria. You further acknowledge and agree that your acceptance of a franchise for the operation of a Papa Ray's Pizza Restaurant at the Premises is based on your own independent investigation of the suitability of the Premises. | You acknowledge and agree that our approval of the premises for your Papa Ray's Pizza the Premises indicates only that we believe that the |
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the term "Premises" refers to the physical location where the Papa Ray's Pizza Restaurant will operate under the Franchise Agreement. While the FDD excerpt does not explicitly link the definition of "Premises" to gross revenue, it does emphasize the importance of the location and the franchisee's independent investigation of its suitability.
Aw's approval of the premises indicates only that they believe the location meets their then-current acceptable criteria. However, Aw does not guarantee the suitability of the Premises for a Papa Ray's Pizza Restaurant, the economic terms of the lease, or for any other purpose. The document makes it clear that Aw is not responsible if a site they approve fails to meet revenue expectations due to changing demographic or economic factors.
This means that while Aw may approve a location, the franchisee bears the ultimate responsibility for assessing its potential and ensuring its financial viability. The franchisee must conduct their own due diligence to determine if the location is likely to generate sufficient gross revenue to meet their business goals and obligations under the Franchise Agreement, including the Minimum Annual Gross Revenue of $300,000 beginning in the second year of operation.
Therefore, a prospective Aw franchisee should not rely solely on Aw's approval of the Premises but should instead conduct thorough market research, assess local competition, and carefully evaluate the lease terms to determine if the location is likely to support a successful Papa Ray's Pizza Restaurant. They should consult with experienced business advisors and real estate professionals to make an informed decision about the suitability of the Premises.