For how long after the Aw franchise is terminated or expires am I prohibited from involvement in a competing business?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| n. Franchisor’s right of first refusal | Section 14.6 | We can match any offer for your business or an |
| to acquire franchisee’s business | ownership interest in you. | |
| o. Franchisor’s option to purchase franchisee’s business | Section 16.7 | We may within 30 days of termination or expiration purchase certain assets of your Papa Ray’s Pizza Restaurant at lesser of cost or fair market value. |
| p. Death or disability of franchisee | Section 14.4 | Franchise or ownership interest in you must be assigned to approved buyer within 6 months. |
| q. Non-competition covenants | Section 9.3 | No involvement in competing business |
| during the term of the franchise | anywhere. | |
| r. Non-competition covenants after the franchise is terminated or expires | Section 17.1 | No involvement in a competing business for 2 years within 20 miles of your Papa Ray’s Pizza Restaurant or of any other Papa Ray’s Pizza Restaurant (same restrictions apply after assignment). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 34–36)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, if your franchise is terminated or expires, you are prohibited from involvement in a competing business for a period of 2 years. This restriction applies within a 20-mile radius of your Papa Ray’s Pizza Restaurant or any other Papa Ray’s Pizza Restaurant. This non-compete agreement remains in effect even after the assignment of the franchise.
This means that after your franchise agreement ends, you cannot operate or be involved in a similar pizza business within the specified geographic area for the stated duration. This is a standard practice in franchising to protect the brand and market share of the franchisor and other franchisees. The non-compete aims to prevent former franchisees from using the knowledge and experience gained during their time with the franchise to unfairly compete against the system.
It is important to note that the restriction applies not only to your former location but also to any other Aw location. This broadens the scope of the non-compete and limits your options for starting a competing business in areas where Aw has a presence. Prospective franchisees should carefully consider the implications of this non-compete clause, especially if they plan to remain in the same geographic area after the franchise agreement ends. Understanding the terms and limitations of the non-compete is crucial for future business planning.