What is the purpose of the Aw franchise lease assignment given to the Assignee?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| (a) | Consents | to the | foregoing | Collateral | Assignment | of Lease | executed by ("Assignor") in favor of Rayyan Pizza Franchise |
|---|---|---|---|---|---|---|---|
| Assignor under the Lease within thirty (30) days of notice to Assignee its defaults; and | LLC ("Assignee), and agrees that if Assignee takes possession of the leased premises and confirms to Lessor the assumption of the Lease by Assignee as lessee under it in writing, Lessor shall recognize Assignee as lessee under the Lease, provided that Assignee cures the defaults of that Assignor has not cured | ||||||
| (b) | LESSOR: | under the Lease and who is reasonably acceptable to Lessor, and upon such shall have no further liability or obligation under the Lease as assignee, lessee or otherwise. | Agrees that Assignee may further assign the Lease to a person, firm or corporation who has been granted a franchise by Assignee and who agrees to assume the lessee's obligations assignment Assignee | ||||
| Dated: | CORPORATE SIGNATURE: | ||||||
| ATTEST: | a | corporation | |||||
| By: | By: | ||||||
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Exhibit 3 outlines the Collateral Assignment of Lease. Aw may require that the franchisee's lease be collaterally assigned to them. This means that the franchisee (Assignor) assigns their rights in the lease to Rayyan Pizza Franchise, LLC (Assignee/Franchisor). This assignment can be exercised if the franchisee defaults under the lease or the Franchise Agreement, or upon the expiration or termination of the Franchise Agreement.
The lease assignment ensures that Aw has control over the restaurant premises if the franchisee fails to meet their obligations. The lessor must provide written notice to Aw of any default by the franchisee and give Aw an additional fifteen days to cure the default. If Aw cures the default, the lessor must assign the lease to Aw. This protects Aw's interest in maintaining a location for a Papa Ray's Pizza Restaurant.
The lease must include specific terms that benefit Aw, such as ensuring the lease term is at least equal to the franchise agreement term, allowing Aw to use required signs on the premises, and restricting the premises to only operating a Papa Ray's Pizza Restaurant. Upon expiration or termination of the franchise agreement, Aw has the right to enter the premises and remove any signs or items identifying Aw's marks. The lessor also agrees that Aw may further assign the lease to a person, firm, or corporation who has been granted a franchise by Assignee and who agrees to assume the lessee's obligations.