What happens to the Aw franchise if the franchisee is in default under any of the terms of the franchise agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
upon delivery to you of written notice that such breach has not been cured in a reasonable time and we are electing to terminate.
15.3 Right to Operate Upon Default. In addition to our right to terminate this Agreement and not in lieu of such right or any other rights, in the event that you have not cured a default under this Agreement within fourteen (14) days after receipt of a written notice of default, we may, at our option, enter upon the Premises and exercise complete authority with respect to the operation of your Papa Ray's Pizza Restaurant until such time as we determine that the default has been cured and that there is compliance with the requirements of this Agreement. You acknowledge and agree that our agent or other representative designated by us may take over, control and operate your Papa Ray's Pizza Restaurant, that you shall pay us the then-current published fee for such management service, plus all travel expenses, room and board and other expenses reasonably incurred by such agent or representative so long as it shall be required to enforce compliance with this Agreement. You further acknowledge that if we temporarily operate your Papa Ray's Pizza Restaurant for you under this Paragraph 15.4, you will indemnify and hold harmless us and our agent or representative respecting any and all claims arising out of our operation of your Papa Ray's Pizza Restaurant under this Paragraph 15.4. Nothing herein shall require us to operate your Papa Ray's Pizza Restaurant when you are in default.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, if a franchisee fails to correct a default within 14 days of receiving written notice, Aw has the option to take control of the Papa Ray's Pizza Restaurant. Aw can enter the premises and exercise complete authority over the restaurant's operation until Aw determines the default has been resolved and the franchise agreement is being followed.
The franchisee is obligated to pay Aw a management service fee, at the then-current published rate, along with all travel expenses, room and board, and other expenses reasonably incurred by Aw's agent or representative during the period Aw is enforcing compliance with the agreement. The franchisee also agrees to indemnify and hold Aw harmless from any claims arising from Aw's operation of the Papa Ray's Pizza Restaurant during this period.
It is important to note that Aw is not required to operate the Papa Ray's Pizza Restaurant even if the franchisee is in default. This option is in addition to Aw's right to terminate the agreement, and does not replace any other rights Aw may have. This means that Aw has significant latitude in how it responds to a franchisee's default, ranging from taking over operations temporarily to terminating the franchise agreement entirely.