Does Aw grant franchises in reliance upon the attitude of the franchisee?
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
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw does grant franchises in reliance upon the attitude of the franchisee. Specifically, the document states that Aw grants franchises based on the "individual or collective character, skill, aptitude, attitude, business ability and financial capacity" of the franchisee and their owners. This means that Aw places significant importance on these qualities when deciding whether to award a franchise.
This reliance on the franchisee's character and attitude has implications for the transfer of the franchise. The FDD states that the franchisee acknowledges that the rights and duties created by the agreement are personal to them, and Aw has granted the franchise in reliance upon the individual qualities of the franchisee and their owners. Therefore, the franchisee cannot assign or transfer the franchise without Aw's prior written approval. This approval will not be unreasonably withheld if the franchisee and their owners are in compliance with the agreement and the proposed assignee meets Aw's standards for good moral character, business experience, aptitude, and financial resources.
This policy is fairly standard in the franchise industry, as franchisors want to ensure that franchisees are a good fit for their brand and are capable of successfully operating the business. By carefully screening potential franchisees and considering their character, skills, and attitude, Aw aims to maintain the quality and consistency of its brand. This also protects Aw from potential damage to its reputation that could arise from a franchisee with a poor attitude or lack of business acumen.