If the Aw Premises is within a limited use facility, how is the Protected Area defined?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, in the event the location of the Premises is within a limited use facility, your Protected Area shall be limited to the limited use facility (as defined below) in which your Papa Ray's Pizza Restaurant is located.
- 2.4 Our Reservation of Rights.
We have the right to grant outside of the Protected Area such other Papa Ray's Pizza Restaurant businesses and franchises as we, in our sole and exclusive discretion, deem appropriate.
We and any affiliates reserve the right, both within and outside of the Protected Area to:
- (a) grant a Papa Ray's Pizza Restaurant franchise or operate ourselves or through an affiliate a Papa Ray's Pizza Restaurant located within a limited use facility.
A limited use facility includes those located within airports, railroad stations or other transportation facilities; stadiums, racetracks or other sport facilities; enclosed shopping centers; casinos; theaters, auditoriums, amusement parks or other entertainment facilities; military bases; and college campuses; and similar types of captive locations;
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the Protected Area for a franchise located within a limited use facility is restricted to that specific facility. This means that if an Aw restaurant is situated in an airport, shopping mall, or stadium, the franchisee's exclusive operating territory only extends to the confines of that venue.
This limited Protected Area has significant implications for potential Aw franchisees. Unlike standard locations that have a radius of at least three miles, a franchisee in a limited use facility will not have any territorial protection outside of that facility. Aw retains the right to establish other franchises or operate its own restaurants outside the limited use facility, even if they are in close proximity. This could lead to increased competition and potentially lower sales for the franchisee.
Aw defines a "limited use facility" as locations within airports, railroad stations, transportation facilities, stadiums, racetracks, sports facilities, enclosed shopping centers, casinos, theaters, auditoriums, amusement parks, entertainment facilities, military bases, college campuses, and similar captive locations. These locations are often characterized by high foot traffic but also unique operating conditions and restrictions. Prospective franchisees should carefully consider the risks and opportunities associated with operating in such an environment and how it might impact their business's potential.
Aw also retains specific rights, including the right to grant franchises or operate restaurants within limited use facilities, even within another franchisee's Protected Area. They also reserve the right to distribute products and services through alternative channels like supermarkets, the internet, and other retail facilities, both within and outside the Protected Area. This further emphasizes the importance of understanding the specific terms and conditions related to territorial protection, especially for locations in non-traditional settings.