What happens if the lessor does not give Aw written notice of default by the franchisee?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
At our option, we may require that the lease: (i) have a term, with initial and renewal terms, at least equal to the initial term of this Agreement; (ii) be collaterally assigned to us (with the consent of the lessor, if required), by execution of the Collateral Assignment of Lease attached hereto as Exhibit 3 (the assignment may be exercised only upon your default under the lease or this Agreement or the expiration or termination of this Agreement); (iii) provides that the lessor shall give written notice to us (concurrently with you) of any default by you under the lease, and will give us an additional fifteen (15) days to cure any default not cured by you during the cure period and assign the lease to us if defaults are cured by us; (iv) permits the use on the Premises of all signs required by the us for Papa Ray's Pizza Restaurants, subject to applicable local laws, codes and ordinances; (v) provides that on expiration or termination of your Franchise Agreement, we may enter the leased
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw may require that the lease for the premises of the Papa Ray's Pizza Restaurant include a provision where the lessor gives written notice to Aw concurrently with the franchisee of any default by the franchisee under the lease. Furthermore, Aw may require that the lessor provide Aw with an additional fifteen days to cure any default not cured by the franchisee during the cure period and assign the lease to Aw if the defaults are cured by Aw.
This clause protects Aw's interest in the location. If the franchisee defaults on the lease, Aw has the opportunity to cure the default and keep the location operational. This is especially important for maintaining brand presence and minimizing disruptions to the Aw franchise system.
If the lease does not contain this provision and the lessor does not notify Aw of a default by the franchisee, Aw may not have the opportunity to cure the default or protect its interest in the location. This could lead to the franchisee losing the location and potentially damaging Aw's brand reputation. Therefore, it is crucial for prospective Aw franchisees to ensure that any lease agreement includes the notification provision to Aw, as required by Aw.