What happens to the leased premises upon expiration or termination of the Aw Franchise Agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
16.5 Assignment of Lease. Upon termination or expiration of this Agreement, at our option you shall immediately assign to us your interest in any lease then in effect for the premises of your Papa Ray's Pizza Restaurant, as you agreed to in the Exhibit 3 Collateral Assignment of Lease.
16.6 De-Identification of Premises. Upon termination or expiration of this Agreement, you agree, in the event you continue to operate or subsequently begin to operate any other business (subject to any restrictions against doing so provided in this Agreement), not to use any reproduction, counterfeit, copy or colorable imitation of the Marks either in connection with such other business or the promotion thereof, which is likely to cause confusion, mistake or deception, or which is likely to dilute our exclusive rights in and to the Marks and further agree not to utilize any designation of origin or description or representation which falsely suggests or represents an association or connection with us so as to constitute unfair competition.
If we do not opt to take assignment of the lease for the Premises upon the expiration or termination of this Agreement, you shall immediately make such
modifications or alterations to the Premises as may be necessary to prevent any association between us or the System and any business thereon subsequently operated by you or others, and shall make such specific additional changes thereto as we may reasonably request for that purpose, including, without limitation, removal of all distinctive physical and structural features identifying the System. In the event you fail or refuse to comply with the requirements of this Paragraph, we shall have the right to enter upon the premises, without being guilty of trespass or any other tort, for the purpose of making or causing to be made such changes as may be required at your expense, which expense you agree to pay upon demand.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, upon the expiration or termination of the Franchise Agreement, several actions concerning the leased premises may occur. Aw has the option to require the franchisee to assign the lease to them. If Aw exercises this option, the franchisee must immediately assign their interest in the lease to Aw, as agreed in the Collateral Assignment of Lease. This ensures that Aw can continue operating a Papa Ray's Pizza Restaurant at that location if they choose. The lease agreement itself may contain clauses that allow Aw to enter the premises and remove any signs or items identifying the Marks upon expiration or termination of the agreement. The lease may also stipulate that the premises be used only for operating an Aw restaurant.
If Aw does not opt to take assignment of the lease, the franchisee is obligated to modify the premises to eliminate any association with Aw or the Papa Ray's Pizza Restaurant system. This includes removing distinctive physical and structural features that identify the system. Aw retains the right to request specific additional changes for this purpose. Should the franchisee fail to comply with these requirements, Aw has the right to enter the premises and make the necessary changes at the franchisee's expense.
These provisions ensure that upon termination or expiration of the franchise agreement, the franchisee cannot continue to operate a competing business in a way that would confuse customers or dilute Aw's brand. The franchisee is responsible for the costs associated with de-identifying the premises unless Aw chooses to take over the lease. This is a standard practice in franchising to protect the brand's identity and prevent unfair competition.