Do all obligations of Aw terminate upon expiration of the Franchise Agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.10 Continuing Obligations. All obligations of the Company and you which expressly or by their nature survive the expiration or termination of this Agreement will continue in full force and effect subsequent to and notwithstanding its expiration or termination and until they are satisfied or by their nature expire.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, not all obligations terminate upon the expiration or termination of the Franchise Agreement. Section 16.10 states that any obligations that, by their nature, are meant to survive the agreement's end will remain in effect. This means that even after the franchise term is over, certain responsibilities and duties continue until they are either fulfilled or naturally expire.
Several sections of the agreement outline specific obligations that extend beyond the termination or expiration date. These include the franchisee's duty to pay all outstanding amounts owed to Aw, encompassing royalty fees, marketing fund contributions, and service charges. Additionally, the franchisee must adhere to post-term covenants, such as those detailed in Section 17 regarding non-competition. The franchisee is also responsible for the costs Aw incurs in enforcing any provisions of Section 16 after the agreement ends.
Furthermore, upon termination or expiration, the franchisee must cease operating the Papa Ray's Pizza Restaurant, de-identify the premises to avoid association with Aw, and transfer rights to telephone numbers, domain names, and social media presences to Aw. The franchisee must also protect Aw's confidential information and return all related materials. These stipulations ensure that Aw's brand and proprietary information remain protected even after the franchise agreement concludes.