How many additional days does Aw get to cure a franchisee's default under the lease?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw may have the right to an additional 15 days to cure a default under the lease if the franchisee fails to do so within the cure period outlined in the lease. Specifically, the lease agreement between the franchisee and the lessor can be structured, at Aw's option, to include a provision that the lessor must provide written notice to Aw concurrently with the franchisee regarding any default by the franchisee under the lease.
This provision ensures that Aw is informed of any lease defaults, giving them the opportunity to protect their interest in the franchise location. This is particularly relevant because the franchise's operation depends heavily on maintaining the lease for the premises. By having this additional cure period, Aw can prevent potential disruptions to the franchise operations that could arise from a lease termination.
For a prospective Aw franchisee, this clause offers a degree of security. It means that a simple oversight or temporary financial difficulty that leads to a lease default might be resolved by Aw stepping in, preventing a more severe outcome like losing the location. However, it's important to note that Aw is not obligated to cure the default; it's merely an option they may exercise. The franchisee should still diligently manage their lease obligations to avoid defaults in the first place.