What happens if the owners of an Aw entity franchisee breach the agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
15.1 By the Company Without Opportunity to Cure. You will be deemed to be in default and we may, at our option, terminate this Agreement and all rights granted by this Agreement, without affording you an opportunity to cure the default, effective immediately upon delivery of notice of termination to you, if you (or any of your Owners):
15.2 By the Company With Opportunity to Cure. We have the right to terminate this Agreement upon written notice to you if you (or any of your Owners):
(a) fail to accurately report the Gross Revenue of your Papa Ray's Pizza Restaurant or to timely pay royalty fees, marketing fund contributions, or other payments due to us or our affiliates, and do not correct such failure within ten (10) days after written notice of such failure is delivered to you;
(b) commit any act or omission of default under the lease for the Premises and do not cure the default within the applicable cure period set forth in the lease;
(c) fails to meet the minimum Gross Revenue requirement described in Section 2.7 above following notice and a twelve (12) month period in which to increase the Gross Revenue in order to meet the required minimum Gross Revenue requirement; or
(d) fail to comply with any other provision of this Agreement or any mandatory specification, standard or operating procedure we prescribe from time to time, and do not correct such failure within thirty (30) days after written notice of such failure to comply is delivered to you. If such breach cannot be reasonably be cured within such thirty (30) day period and if you commence a bona fide program to cure such breach within thirty (30) days and continue to take such actions as are necessary to complete such cure until completed, you will be given the reasonable amount of time required to complete the cure. If you fail to continue to take the necessary action to cure or you do not complete the cure within the reasonable period, then we may terminate this Agreement effective
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 32–33)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the consequences for breaching the franchise agreement vary depending on the nature of the breach. Aw can terminate the agreement with or without an opportunity for the franchisee to correct the issue.
Aw can terminate the agreement immediately without giving the franchisee a chance to fix the problem if the franchisee or their owners violate anti-terrorism laws.
In other situations, Aw will provide written notice and an opportunity to cure the breach. For instance, if a franchisee fails to accurately report gross revenue or doesn't pay royalties, marketing fund contributions, or other payments on time, they have ten days after receiving written notice to correct the failure. If the franchisee defaults on their lease, they have the cure period outlined in the lease agreement to fix it. If the franchisee fails to meet the minimum gross revenue requirement, they have a 12-month period after notice to increase gross revenue. For any other breaches of the agreement or mandatory operating procedures, the franchisee typically has 30 days to correct the issue. If the breach cannot be reasonably cured within 30 days, and the franchisee begins a program to cure the breach, the franchisee will be given a reasonable amount of time to complete the cure.
If the franchisee fails to cure the breach within the given timeframe, Aw can terminate the agreement immediately after providing written notice. This could result in the franchisee losing their business and the associated investment.