If an Aw franchisee loses the right to occupy the premises, can Aw terminate the agreement immediately?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
ded in Paragraphs 14.2 and 14.3, provided that if the sale to such purchaser is not completed within one-hundred twenty (120) days after delivery of such offer to us, or if there is a material change in the terms of the offer, we will again have the right of first refusal herein provided.
15. TERMINATION OF THE FRANCHISE.
- 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 i
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw can terminate the franchise agreement immediately if the franchisee loses the right to occupy the premises. Specifically, Aw does not need to provide an opportunity for the franchisee to cure this default. This is a significant point for prospective franchisees to consider.
This immediate termination clause means that if an Aw franchisee fails to maintain their lease or otherwise loses the right to occupy their restaurant location, Aw has the right to terminate the agreement without allowing the franchisee any time to fix the situation. This could occur due to eviction, failure to pay rent, or other lease violations. The franchisee would then immediately lose their franchise rights.
In the franchise industry, it is not uncommon for franchisors to have the right to terminate an agreement if a franchisee loses possession of their premises. However, the immediate nature of Aw's termination right, without opportunity to cure, is more strict than some other franchise agreements. A prospective Aw franchisee should carefully consider the terms of their lease and ensure they have strong safeguards in place to prevent losing their location, as this could lead to immediate termination of their franchise agreement.
This clause underscores the importance of maintaining a strong and stable lease agreement. Franchisees should seek legal counsel to review their lease and understand their rights and obligations to minimize the risk of losing their right to occupy the premises, which could trigger immediate termination by Aw.