What notice requirements does Aw impose on the lessor in the event of a franchisee default?
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 agreement between the franchisee and the lessor include a provision mandating the lessor to provide written notice to Aw concurrently with the franchisee regarding any default by the franchisee under the lease. Furthermore, the lessor must grant Aw an additional fifteen (15) days to rectify any default that the franchisee has failed to cure during the initial cure period. If Aw cures the defaults, the lease must be assigned to Aw.
This requirement ensures that Aw is informed of any potential issues with the franchisee's lease obligations, giving Aw an opportunity to intervene and protect its interests. By receiving concurrent notice, Aw can promptly assess the situation and decide whether to assist the franchisee in curing the default or take other necessary actions. The additional 15-day cure period allows Aw to step in and resolve the default, potentially preventing lease termination and ensuring the continued operation of the Papa Ray's Pizza Restaurant at that location.
This provision is beneficial for Aw as it provides a safety net in case a franchisee faces difficulties in meeting their lease obligations. However, it also places an obligation on Aw to monitor the franchisee's compliance with the lease and to be prepared to take action if a default occurs. For a prospective franchisee, this highlights the importance of maintaining a good relationship with the lessor and promptly addressing any lease-related issues to avoid triggering the notification to Aw and potential intervention.