Can an Aw franchisee transfer their franchise through consolidation without Aw's prior written approval?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.2 By Franchisee With Approval. You understand and acknowledge that the rights and duties created by this Agreement are personal to you and we have granted the franchise in reliance upon the individual or collective character, skill, aptitude, attitude, business ability and financial capacity of you (and your Owners). Therefore, except as otherwise provided in Paragraph 14.5 below, neither the franchise, your Papa Ray's Pizza Restaurant or a substantial portion of the assets of your Papa Ray's Pizza Restaurant (or any interest therein) nor any part or all of the ownership of an entity that is the Franchisee may be voluntarily, involuntarily, directly or indirectly, assigned, sold, subdivided, subfranchised or otherwise transferred by you or your Owners (including, without limitation, by merger or consolidation, by issuance of additional securities representing an ownership interest in the Franchisee, or in the event of the death of the Franchisee or an Owner of the Franchisee, by will, declaration of or transfer in trust or the laws of intestate succession) without our prior written
approval. Further, neither your Papa Ray's Pizza Restaurant nor a substantial portion of its assets may be transferred without a concurrent transfer of this Agreement and the franchise rights granted hereunder to the same transferee. Any such assignment or transfer without our prior written approval will constitute a breach of this Agreement and will convey no rights to or interests in the franchise, the franchisee entity, your Papa Ray's Pizza Restaurant or its assets.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, a franchisee cannot transfer their franchise through consolidation without prior written approval from Aw. The FDD states that the rights and duties within the agreement are personal to the franchisee, and Aw has granted the franchise based on the franchisee's individual or collective character, skills, aptitude, business ability, and financial capacity.
Specifically, the franchise, the Papa Ray's Pizza Restaurant, or a substantial portion of its assets cannot be directly or indirectly assigned, sold, subdivided, subfranchised, or otherwise transferred by the franchisee or their owners without Aw's prior written approval. This includes transfers through merger or consolidation, issuance of additional securities representing an ownership interest, or in the event of death, by will, declaration of trust, or intestate succession.
Any assignment or transfer without Aw's prior written approval constitutes a breach of the agreement and conveys no rights or interests in the franchise. This requirement ensures that Aw maintains control over who operates a Papa Ray's Pizza Restaurant and that any new operator meets their standards. A prospective franchisee should be aware of these restrictions and ensure they obtain written approval from Aw before attempting to transfer their franchise through consolidation or any other means.