What happens to the goodwill established by an Aw franchisee's use of the Marks?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
7.1 Ownership and Goodwill of Marks. You acknowledge that we own the Marks and that your right to use the Marks is derived solely from this Agreement and is limited to your operation of your Papa Ray's Pizza Restaurant pursuant to and in compliance with this Agreement and all applicable specifications, standards and operating procedures we prescribe from time to time during the term of the franchise. Any unauthorized use of the Marks by you will constitute an infringement of our rights in and to the Marks. You acknowledge and agree that all usage of the Marks by you and any goodwill established by your use of the Marks will inure to our exclusive benefit of and that this Agreement does not confer any goodwill or other interests in the Marks on you (other than the right to operate a Papa Ray's Pizza Restaurant in compliance with this Agreement).
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw owns the Marks, and the franchisee's right to use them is derived solely from the Franchise Agreement. This right is limited to the operation of a Papa Ray's Pizza Restaurant in compliance with the agreement and Aw's specifications. Any unauthorized use of the Marks by the franchisee constitutes an infringement of Aw's rights.
The agreement specifies that all usage of the Marks by the franchisee and any goodwill established through that use will accrue exclusively to the benefit of Aw. The Franchise Agreement does not grant the franchisee any goodwill or other interests in the Marks, aside from the right to operate a Papa Ray's Pizza Restaurant in compliance with the agreement. This means that while franchisees benefit from using the established brand and trademarks of Aw, they do not gain any ownership or equity in the brand itself.
Upon termination or expiration of the Franchise Agreement, the franchisee's right to use the Marks ceases. The franchisee must discontinue using the Marks and cannot identify themselves as a current or former Papa Ray's Pizza Restaurant. They must also return or destroy all materials containing the Marks, cancel any registrations related to the Marks, and notify relevant parties, such as the telephone company and listing agencies, of the termination of their right to use associated telephone numbers and listings. This ensures that Aw retains complete control over its brand and trademarks, even after a franchise relationship ends.