Is the protected area granted by Aw dependent on the franchisee's compliance with the Franchise Agreement?

According to Aw's 2025 Franchise Disclosure Document, the franchisee's protected area is contingent upon their compliance with the terms of the Franchise Agreement. Aw will not establish another Papa Ray's Pizza Restaurant franchise or operate one themselves or through an affiliate within the franchisee's protected area as long as the Franchise Agreement is in effect and the franchisee is not in default of any terms. This protected area is described in Exhibit 1 of the agreement.

This means that if an Aw franchisee fails to meet their obligations under the Franchise Agreement, such as maintaining standards, paying royalties, or adhering to operational guidelines, Aw reserves the right to establish another franchise within the originally designated protected area. This conditionality is a fairly standard practice in franchising, designed to ensure brand consistency and protect the overall network.

For a prospective Aw franchisee, this underscores the importance of understanding and adhering to all terms outlined in the Franchise Agreement. Failure to do so could result in a loss of the exclusive operating rights within their protected area, potentially leading to increased competition and reduced profitability. It is crucial to review the agreement carefully and seek legal counsel to fully comprehend the obligations and potential consequences of non-compliance.