What happens upon a default by the Assignor under the Aw franchise Lease?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.2 Lease of Premises. Any lease or sublease of the Premises must be approved by us before it is executed by you and we can require that certain terms and provisions be included in the lease or sublease.
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)
Based on the 2025 FDD, Aw requires that any lease or sublease of the premises be approved by them before it is executed by the franchisee. Aw can also require certain terms and provisions to be included in the lease or sublease.
At Aw's option, the lease may be required to have a term, including initial and renewal terms, at least equal to the initial term of the Franchise Agreement. The lease may also be collaterally assigned to Aw, with the lessor's consent if required, through the execution of a Collateral Assignment of Lease. This assignment can be exercised upon the franchisee's default under the lease or the Franchise Agreement, or upon the expiration or termination of the Franchise Agreement.
The lease may also stipulate that the lessor provide written notice to Aw concurrently with the franchisee of any default by the franchisee under the lease. The lessor will give Aw an additional fifteen days to cure any default not cured by the franchisee during the cure period and assign the lease to Aw if Aw cures the defaults. Additionally, the lease should permit the use of all signs required by Aw for Papa Ray's Pizza Restaurants on the premises, subject to applicable local laws, codes, and ordinances. The lease should also state that the premises will only be used for the operation of a Papa Ray's Pizza Restaurant and that the lessor will not lease other premises in the same shopping center to a competing business.