What is the relationship between the term of the lease and the term of the Aw Franchise Agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
Any lease or sublease of the Premises must be approved by us before it is executed by you and we can require that certain terms and provisions be included in the lease or sublease.
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 for the premises of the Papa Ray's Pizza Restaurant have a term, including initial and renewal terms, that is at least equal to the initial term of the Franchise Agreement. The standard term for an Aw Franchise Agreement is ten years, so Aw may stipulate that the lease also be for a minimum of ten years.
This requirement ensures that Aw has control over the premises for the duration of the franchise agreement. It also protects Aw's interest in maintaining a consistent brand presence and operational standards. By aligning the lease term with the franchise term, Aw reduces the risk of a franchisee losing their location before the franchise agreement expires, which could disrupt operations and damage the brand's reputation.
Furthermore, Aw may require that the lease be collaterally assigned to them, giving Aw the right to take over the lease if the franchisee defaults or upon the expiration or termination of the Franchise Agreement. Aw also wants to ensure that the lease provides that the lessor gives written notice to Aw (concurrently with the franchisee) of any default by the franchisee under the lease, and will give Aw an additional fifteen (15) days to cure any default not cured by the franchisee during the cure period and assign the lease to Aw if defaults are cured by Aw. These stipulations are designed to protect Aw's interests and ensure the continued operation of the Papa Ray's Pizza Restaurant at the location, even if the franchisee faces difficulties.