Can Aw require the assignee to execute such other ancillary agreements as are then customarily used by Aw?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
r approval of an assignment, provided that the proposed assignee is, in our opinion, of good moral character and has sufficient business experience, aptitude and financial resources to own and operate a Pap Ray's Restaurant, does not have any conflicting interests unacceptable to us, and otherwise meets our then applicable standards for franchisees. In addition the following conditions must be met prior to, or concurrently with, the effective date of the assignment:
- (a) all obligations of you and your Owners incurred in connection with this Agreement have been assumed by the assignee and, as applicable, its owners;
- (b) you have paid such royalty fees, marketing fund contributions, 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 Aw's 2025 Franchise Disclosure Document, if a franchisee seeks to assign their franchise agreement to a new party, Aw has specific conditions that must be met. One of these conditions involves the assignee potentially having to agree to additional agreements. Specifically, Aw can require the assignee to execute the form of franchise agreement, owner guarantees, and other ancillary agreements that Aw customarily uses when granting new franchises for a Papa Ray's Pizza Restaurant.
These ancillary agreements could include terms and conditions that differ from the original franchise agreement. This means that the assignee might be subject to different royalty fees, marketing fund contributions, or other fees than the original franchisee. Alternatively, Aw can require the assignee to sign an assignment and assumption agreement that is satisfactory to Aw, where the assignee agrees to take on all of the original franchisee's obligations under the existing agreement.
In addition to these agreements, the assignee must also complete the initial training program for new franchisees to Aw's satisfaction. The assignee must also meet Aw's standards for franchisees, including demonstrating good moral character, sufficient business experience, aptitude, and financial resources. Furthermore, either the original franchisee or the assignee is responsible for paying Aw a transfer fee of $9,000, though this fee is reduced to $5,000 if the assignee is an existing franchisee approved for an additional franchise.