What initial and renewal term length can Aw require in the lease agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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)
According to Aw's 2025 Franchise Disclosure Document, Aw must approve any lease or sublease before it is executed by the franchisee. Aw can also require specific terms and provisions to be included in the lease or sublease.
Specifically, Aw has the option to require that the lease have a term, including initial and renewal terms, that are at least equal to the initial term of the Franchise Agreement. This means that if the initial term of the franchise agreement is, for example, 10 years, Aw can require that the lease agreement also have an initial term of at least 10 years, with any renewal options also matching or exceeding the franchise agreement's term.
Additionally, Aw may require the lease to be collaterally assigned to them, ensuring that Aw has certain rights to the lease in case of franchisee default or termination of the Franchise Agreement. Aw can also stipulate that the lessor provide them with written notice of any franchisee default, giving Aw the opportunity to cure the default and potentially assume the lease. These provisions protect Aw's interests in maintaining the location for a Papa Ray's Pizza Restaurant.