What happens if an Aw franchisee pleads no contest to a felony?

According to Aw's 2025 Franchise Disclosure Document, if a franchisee pleads no contest to a felony, it constitutes a breach of the franchise agreement. Specifically, this is listed as one of the conditions that allows Aw to terminate the franchise agreement. Additionally, engaging in any dishonest or unethical conduct that could negatively impact Aw's reputation, the franchisee's Papa Ray's Pizza Restaurant, the System, or the goodwill associated with the Marks also constitutes a breach.

This provision protects Aw's brand and reputation by ensuring that franchisees adhere to a certain standard of conduct. A felony conviction or a plea of no contest suggests a serious violation of the law, which could reflect poorly on the entire franchise system. The inclusion of "dishonest or unethical conduct" broadens the scope, allowing Aw to address actions that may not be criminal but still damaging.

For a prospective Aw franchisee, this means that maintaining a clean legal record and adhering to ethical business practices is crucial. A felony conviction, or even pleading no contest, can lead to the termination of the franchise agreement, resulting in the loss of the business and the initial investment. Franchisees should be aware of this clause and ensure they understand the implications of their actions, both legal and ethical, on their franchise agreement.

It is important for potential franchisees to fully understand all the conditions that could lead to termination of the agreement, as outlined in Item 22 of the FDD. This understanding will help them avoid actions that could jeopardize their franchise and investment.