After the Aw franchise is terminated or expires, what are the geographic limits of the non-competition covenant?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| n. Franchisor’s right of first refusal | Section 14.6 | We can match any offer for your business or an |
| to acquire franchisee’s business | ownership interest in you. | |
| o. Franchisor’s option to purchase franchisee’s business | Section 16.7 | We may within 30 days of termination or expiration purchase certain assets of your Papa Ray’s Pizza Restaurant at lesser of cost or fair market value. |
| p. Death or disability of franchisee | Section 14.4 | Franchise or ownership interest in you must be assigned to approved buyer within 6 months. |
| q. Non-competition covenants | Section 9.3 | No involvement in competing business |
| during the term of the franchise | 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 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 34–36)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, if the franchise is terminated or expires, the franchisee is subject to a non-competition covenant. This means the franchisee cannot be involved in a competing business for a period of 2 years. The geographic scope of this restriction extends to within 20 miles of the franchisee's former Papa Ray’s Pizza Restaurant location or any other Papa Ray’s Pizza Restaurant.
This post-term non-compete agreement is a fairly standard practice in franchising to protect the brand and other franchisees in the system. The 20-mile radius is designed to prevent a former franchisee from directly siphoning customers away from existing Aw locations. The restriction applies even after assignment, meaning if the franchisee sells the business before termination or expiration, the non-compete still applies to the original franchisee.
A prospective Aw franchisee should carefully consider the implications of this non-compete. If they decide to leave the Aw system, they will be restricted from operating a similar business in a defined geographic area for two years. This could limit their future business opportunities and career options. It is important to fully understand these restrictions before signing the franchise agreement.