Does the lessor have to give Aw written notice of any default by the franchisee under the lease?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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 may require that the lease for the premises of the Papa Ray's Pizza Restaurant include a provision where the lessor gives written notice to Aw if the franchisee defaults under the lease. This notice would be sent concurrently to the franchisee.
In addition to the concurrent notice, Aw may require that the lessor give Aw an additional fifteen (15) days to cure any default that the franchisee has not cured during the original cure period. If Aw cures the defaults, the lease can be assigned to Aw.
This provision protects Aw's interest in maintaining the Papa Ray's Pizza Restaurant at that location, even if the franchisee fails to meet their lease obligations. It gives Aw the opportunity to step in, resolve the issue, and continue operating the franchise at that site. This is a beneficial clause for Aw, as it provides a safety net against franchisee lease defaults that could negatively impact the brand.