If the lessor requires consent for collateral assignment of the lease, is that required for Aw?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
Agreement.
- 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
premises and remove all signs, sign-faces and other items identifying Marks;
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, if the lessor requires consent for collateral assignment of the lease, then that consent is required for Aw. Aw may require the franchisee to collaterally assign the lease to them. This assignment can only be exercised if the franchisee defaults under the lease or the Franchise Agreement, or upon the expiration or termination of the Franchise Agreement.
Aw may require that certain terms and provisions be included in the lease or sublease. Specifically, Aw may require the lease to have a term, including initial and renewal terms, that is at least equal to the initial term of the Franchise Agreement. Aw may also require that the lessor provide written notice to Aw concurrently with the franchisee of any default by the franchisee under the lease, giving Aw an additional 15 days to cure any default not cured by the franchisee during the cure period and assign the lease to Aw if defaults are cured by Aw.
Furthermore, Aw may require that the lease permits the use on the premises of all signs required by Aw for Papa Ray's Pizza Restaurants, subject to applicable local laws, codes, and ordinances. The lease must also provide that upon expiration or termination of the Franchise Agreement, Aw may enter the leased premises and remove all signs, sign-faces, and other items identifying Marks. The premises must only be used for the operation of a Papa Ray's Pizza Restaurant, and the lessor must agree not to lease other premises in the same shopping center to a competing business.