What happens upon the termination of the Aw Franchise Agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
and our agent or representative respecting any and all claims arising out of our operation of your Papa Ray's Pizza Restaurant under this Paragraph 15.4. Nothing herein shall require us to operate your Papa Ray's Pizza Restaurant when you are in default.
16. RIGHTS OF THE COMPANY AND OBLIGATIONS OF FRANCHISEE UPON TERMINATION OR EXPIRATION OF THE FRANCHISE.
- 16.1 Payment of Amounts Owed to the Company. You agree to pay to us within ten (10) days after the effective date of termination or expiration (without renewal) of this Agreement such royalty fees, marketing fund contributions, service charges due us on any of the foregoing and all other amounts owed to us and our affiliates which are then unpaid. You must furnish a complete accounting of all such amounts owed to us and our affiliates with the payment.
- 16.2 The Marks. You (and your Owners) agree that after the termination or expiration (without renewal) of this Agreement you will:
- (a) not directly or indirectly at any time or in any manner identify yourself or any business as a current or former Papa Ray's Pizza Restaurant, or as a franchisee or licensee of or as otherwise associated with us, or use the Marks, any colorable imitation thereof or other indicia of a Papa Ray's Pizza Restaurant in any manner or for any purpose, or utilize for any purpose any trade name, trademark, service mark, trade dress, domain name, or other commercial symbol that suggests or indicates a connection or association with us;
- (b) promptly return to us or destroy (whichever we specify) all signs, sign-faces, promotional and advertising materials and other materials containing the Marks or otherwise identifying or relating to a Papa Ray's Pizza Restaurant;
- (c) promptly take such action as may be required to cancel all fictitious or assumed name, "doing business as" or equivalent registrations relating to your use of the Marks;
- (d) promptly notify the telephone company and all listing agencies of the termination or expiration of your right to use any telephone number and any telephone directory listings associated with the Marks and to authorize transfer of same to or at our direction. You acknowledge that as between the Company and you, we have the sole right to and interest in all telephone numbers and directory listings associated with the Marks, and you authorize us, and by execution of the Exhibit 4 Collateral Assignment of Telephone Number have appointed us and any of our officers as your attorney-in-fact, to direct the telephone company and all listing agencies to transfer same to us or at its direction, should you fail or refuse to do so, and the telephone company and all listing agencies may accept such direction or this Agreement as conclusive of our exclusive rights in such telephone numbers and directory listings and its authority to direct their transfer;
- (e) assign to us or our designee all of your right, title and interest in and to any domain name registrations, any web sites, and any listings or presence on any social media platforms or social media networks, or other presence on the internet using the Marks, including passwords and account manager access, and shall promptly notify the necessary parties of the termination of your license to use the Marks, and therefore, your right to use any domain name, website, or other presence on the internet using the Marks, and to authorize a transfer of same to us or our designee;
- (f) furnish to us within thirty (30) days after the effective date of termination or expiration evidence satisfactory to us of your compliance with the foregoing obligations.
- 16.3 Confidential Information. You agree that upon termination or expiration (without renewal) of this Agreement, you will immediately cease to use in any business or otherwise the Confidential Information disclosed to you pursuant to this Agreement and will return to us all copies of the Operations Manual, any proprietary software and other materials containing our proprietary information which have been loaned to you by us.
- 16.4 Cease Operations. Upon termination or expiration of this Agreement, you shall immediately cease to operate your Papa Ray's Pizza Restaurant under this Agreement, either as a franchised or as a non-franchised facility.
- 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.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, several obligations and rights come into effect for both the franchisee and franchisor upon termination or expiration of the franchise agreement. The franchisee must immediately cease operating the Papa Ray's Pizza Restaurant, whether as a franchised or non-franchised entity. The franchisee is also obligated to pay all outstanding royalty fees, marketing fund contributions, service charges, and any other amounts owed to Aw and its affiliates within ten days of termination or expiration, along with a complete accounting of these amounts. The franchisee must stop using any confidential information and return all copies of the Operations Manual, proprietary software, and other materials containing Aw's proprietary information.
Furthermore, the franchisee must not identify themselves or any business as a current or former Papa Ray's Pizza Restaurant or use Aw's trademarks or any similar identifying marks. All signs, promotional materials, and other items bearing Aw's marks must be returned or destroyed as specified by Aw. The franchisee is also required to cancel any fictitious or assumed name registrations related to the use of Aw's marks and notify telephone companies and listing agencies about the termination of their right to use associated telephone numbers and directory listings, authorizing their transfer to Aw. Additionally, the franchisee must assign to Aw all rights to domain names, websites, social media presences, and any other online presence using Aw's marks.
Aw has the option to take assignment of the lease for the premises. If Aw does not exercise this option, the franchisee must modify the premises to remove any association with Aw and the Papa Ray's Pizza Restaurant system. Aw also has the right, but not the duty, to purchase the franchisee's assets, including fixtures, furniture, equipment, inventory, and signs bearing Aw's marks, at the franchisee's cost or fair market value, whichever is less. The franchisee must comply with post-term covenants, including non-compete agreements, and all obligations that survive the termination or expiration of the agreement will remain in effect. The franchisee is responsible for all costs and expenses Aw incurs to enforce these provisions after termination or expiration.