What is the purpose of the assignment agreement in the context of an Aw franchise?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
utions, amounts for purchases and any other amounts owed to us or our affiliates which are then due and unpaid;
- (c) the assignee completes the initial training program required of new franchisees to our satisfaction;
- (d) if required, the lessor of the Premises has consented to your assignment or sublease of the Premises to the proposed assignee;
- (e) the assignee (and, if an entity, its direct or indirect owners) have, at our option, executed and agreed to be bound by either: (a) the form of franchise agreement, owner guarantees and such other ancillary agreements as are then customarily used by us in the grant of franchises for a Papa Ray's Pizza Restaurant, which may provide for royalty fees, marketing fund contributions and other fees and terms and conditions that differ from those contained in this Agreement; or (b) an assignment and assumption agree
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to the 2025 Aw Franchise Disclosure Document, the assignment agreement serves to transfer the franchisee's rights and obligations under the franchise agreement to a new party, subject to Aw's approval. Aw retains significant control over who can become a franchisee and ensures that the new franchisee meets their standards. This protects Aw's brand and ensures consistent operation across all franchise locations.
Specifically, if a franchisee wishes to sell their Aw restaurant, they must obtain Aw's approval for the transfer. The prospective buyer, or assignee, may be required to sign either Aw's then-current standard franchise agreement or an assignment and assumption agreement. If the assignee signs an assignment and assumption agreement, they agree to take on all of the original franchisee's responsibilities under the existing agreement. This includes adhering to the original terms and conditions, as well as any outstanding financial obligations.
Several conditions must be met for Aw to approve the assignment. The assignee must demonstrate good moral character, sufficient business experience, and adequate financial resources. All outstanding payments to Aw must be settled, and the assignee must complete the initial training program. A transfer fee is also required; it is Nine Thousand Dollars ($9,000.00), but if the assignee is an existing franchisee approved for an additional franchise, the fee is reduced to Five Thousand Dollars ($5,000.00). The assignment agreement ensures a smooth transition of ownership while safeguarding Aw's interests and maintaining brand standards.
Furthermore, Aw can assign the agreement to another party. The agreement is binding on and will benefit Aw's successors and assigns, as well as the franchisee's successors and assigns. This ensures that the terms of the franchise agreement remain in effect even if the ownership of Aw changes or the franchisee's business is transferred to another entity.