Does the Aw Franchise Agreement prohibit the franchisee from operating the Papa Ray's Pizza Restaurant at a location other than the one specified?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
. This Franchise Agreement is being presented to you because of the desire you have expressed to obtain the right to develop, own and be franchised to operate a Papa Ray's Pizza Restaurant.
2. GRANT OF FRANCHISE
2.1 Term. You have applied for a franchise to own and operate a Papa Ray's Pizza Restaurant at one site approved by us in the following general area (when the exact location is determined, the parties will complete Exhibit 1 attached hereto):
_________________________________. We have approved your application in reliance on all of the representations you made in that application. As a result, and subject to the provisions of this Agreement, we grant to you a franchise (the "Franchise") to operate a restaurant using the Marks ("Papa Ray's Pizza Restaurant") and to use the System in the operation of that Papa Ray's Pizza Restaurant, for a term of ten (10) years commencing on the Agreement Date, unless this Agreement terminates before the end of such term as provided in Section 16 of this Agreement. Termination or expiration of this Agreement will constitute a termination or expiration of your Franchise. (All references to the "term" of this Agreement refer to the period from the Agreement Date, to the date on which this Agreement actually terminates or expires.)
- 2.2 Full Term Performance. You specifically agree to be obligated to operate the Papa Ray's Pizza Restaurant, perform the obligations of this Agreement, and continuously exert your best efforts to promote and enhance the Papa Ray's Pizza Restaurant and to affect the widest and best possible distribution of products and services from your Papa Ray's Pizza Restaurant within the Protected Territory, for the full term of this Agreement.
- 2.3 Protected Area.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the franchise agreement specifies that a franchisee is granted the right to operate a Papa Ray's Pizza Restaurant at a single, approved site. Section 2.1 states that the franchise is granted to operate a restaurant at "one site approved by us." The exact location is to be determined and documented in Exhibit 1 of the agreement. This indicates that the franchise is site-specific, and the franchisee's rights are tied to that particular location.
Aw's franchise agreement emphasizes "Full Term Performance" at the approved location. Section 2.2 requires the franchisee to operate the Papa Ray's Pizza Restaurant and exert their best efforts to promote the restaurant within the Protected Territory for the full term of the agreement. This further reinforces the expectation that the franchisee will focus their efforts on the approved site. The agreement also defines a "Protected Area" around the approved location in Section 2.3, within which Aw will not establish another Papa Ray's Pizza Restaurant franchise, as long as the franchisee is in compliance with the agreement.
While the agreement does not explicitly state that a franchisee is prohibited from operating at another location, the structure of the agreement suggests that the franchise rights are tied to the approved site. The franchisee's obligations to operate and promote the restaurant, combined with the grant of a protected area around that site, imply that operating at an unapproved location would be a breach of the agreement. A prospective franchisee should seek clarification from Aw regarding the possibility of operating at multiple locations or relocating the Papa Ray's Pizza Restaurant during the franchise term.