What happens if the proposed Aw assignee has conflicting interests?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.3 Conditions for Approval of Assignment. If you (and your Owners) are in compliance with this Agreement, we will not unreasonably withhold our approval of an assignment, provided that the proposed assignee is, in our opinion, of good moral character and has sufficient business experience, aptitude and financial resources to own and operate a Pap Ray's Restaurant, does not have any conflicting interests unacceptable to us, and otherwise meets our then applicable standards for franchisees.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, if a franchisee wishes to assign their franchise agreement to a new party, Aw will assess the proposed assignee. One of the conditions for approval is that the proposed assignee "does not have any conflicting interests unacceptable" to Aw.
This means that Aw has the right to deny the assignment of a franchise if they believe the proposed assignee has interests that could negatively impact the Aw system. The FDD does not define what constitutes "conflicting interests unacceptable" to Aw, leaving this determination at Aw's discretion.
For a prospective Aw franchisee, this highlights the importance of understanding Aw's criteria for evaluating potential assignees. If a franchisee anticipates needing to sell or transfer their franchise in the future, they should discuss with Aw what types of conflicting interests would be unacceptable to ensure a smoother transfer process. This could include owning or operating a competing business, or having a financial stake in a company that does business with competitors.