What happens if Aw judges that the Papa Ray's Pizza Restaurant should be relocated for renewal?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the provisions of Paragraph 3.2 below, and if you have substantially complied with all provisions of this Agreement and any other agreement between us, then on expiration of the initial term of the Franchise, you will have the right to renew the Franchise for one (1) additional successive term of ten (10) years if: (1) you maintain possession of the Premises, or (2) you are unable to maintain possession of the Premises or in our judgment the Papa Ray's Pizza Restaurant should be relocated, and you secure an approved substitute premises and agree to expeditiously develop the substitute premises in compliance with specifications and standards then applicable under new or renewal franchises for Papa Ray's Pizza Restaurants.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, if a franchisee is unable to maintain possession of their current premises at the time of renewal, or if Aw determines that the Papa Ray's Pizza Restaurant should be relocated, the franchisee can still renew the franchise agreement. However, this is contingent upon securing an approved substitute premises. The franchisee must also agree to develop the new premises in compliance with the specifications and standards that Aw requires for new or renewal Papa Ray's Pizza Restaurant franchises.
In essence, Aw retains control over the location of its franchises, even at the point of renewal. This clause ensures that Aw can maintain brand consistency and optimize the locations of its restaurants. For a franchisee, this means that the renewal of their franchise is not solely dependent on their performance but also on the suitability of their location as determined by Aw.
This condition introduces a potential risk for franchisees, as they may be required to invest in a new location to secure their renewal. It is important for prospective franchisees to understand Aw's criteria for site selection and relocation, as well as the potential costs associated with developing a new premises. Franchisees should also consider negotiating terms in their lease agreements that provide flexibility in case relocation becomes necessary.