Does the Aw Franchise Agreement specify any financial thresholds that the franchisee must meet to maintain the protected area?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
resale, retail sale or further distribution by such third party. You shall not sell any products offered for sale through the Papa Ray's Pizza Restaurant through any Alternative Distribution Channels.
- 2.7 Minimum Annual Gross Revenue. Beginning with the second year of operation of the Papa Ray's Pizza Restaurant, you must have annual Gross Revenue for each year of operation of a minimum of Three Hundred Thousand Dollars ($300,000.00) ("Minimum Annual Gross Revenue"). If you do not achieve the Minimum Annual Gross Revenue for any year of operation,
you will be given the next twelve (12) months to increase revenues so that you meet the Minimum Annual Gross Revenue. If you do not meet the Minimum Annual Gross Revenue after having been given a twelve (12) month period to increase sales and achieve the Minimum Annual Gross Revenue, we may either (i) increase the amount that you must expend on local advertising pursuant to Paragraph 12.2 herein to an amount we in our discretion deem necessary in order to increase revenues, (ii) reduce or eliminate your Protected Area upon de
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, a franchisee must meet a minimum annual gross revenue to maintain their protected area. Beginning in the second year of operation, the Aw franchise location must generate at least $300,000 in gross revenue annually.
If an Aw franchisee fails to meet the $300,000 minimum annual gross revenue, they will be given an additional 12 months to improve their revenue. If, after this 12-month period, the location still does not meet the minimum, Aw has the option to take certain actions. These actions include increasing the amount the franchisee must spend on local advertising, reducing or eliminating the franchisee's protected area, or terminating the franchise agreement altogether.
This requirement is important for prospective Aw franchisees to consider. Failure to meet the minimum revenue threshold can lead to increased advertising expenses, loss of the protected area, or even termination of the franchise agreement. This clause incentivizes franchisees to actively manage and promote their Aw locations to achieve the required revenue and maintain their protected territory.