Does Aw require the assignee and its owners to assume all obligations of the franchisee?

According to Aw's 2025 Franchise Disclosure Document, if a franchisee wishes to assign their franchise agreement to a new party, Aw requires that the assignee and their owners assume all the obligations of the original franchisee and their owners. This condition is part of Aw's requirements for approving the assignment of the franchise agreement.

This requirement ensures that the new franchisee (assignee) is fully responsible for all aspects of the franchise agreement, just as the original franchisee was. This includes financial obligations, operational standards, and adherence to Aw's system standards. The assignee must also meet Aw's standards for new franchisees, including demonstrating good moral character, sufficient business experience, aptitude, and financial resources.

For a prospective Aw franchisee, this means that if they plan to sell or transfer their franchise in the future, they need to find a buyer who is willing and able to take on all of their responsibilities and liabilities under the franchise agreement. This could potentially limit the pool of potential buyers and affect the sale price of the franchise. Additionally, the original franchisee remains liable for any breaches or defaults by the assignee unless Aw provides a release.

This requirement is fairly standard in franchising, as franchisors want to ensure that any new franchisee operating under their brand meets their standards and fulfills all obligations to maintain consistency and protect the brand's reputation. Franchisees looking to assign their agreements should carefully review all conditions and seek legal counsel to understand their obligations and potential liabilities.