What is the role of the Assignor in the Collateral Assignment of Lease agreement for Aw?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| KNOW ALL MEN BY THESE PRESENTS, that, a ("Assignor"), does hereby assign, transfer and set over unto |
|---|
| Rayyan Pizza Franchise LLC, an Illinois limited liability company (the "Assignee"), all of Assignor's |
| right, title and interest as tenant in, to and under that certain lease or sublease (collectively, the |
| "Lease") dated, 20 between Assignor, as tenant, and |
| as landlord or sublessor, |
| for the premises known as |
| This Assignment is for collateral purposes only, and except as specified herein, Assignee shall |
| have no liability or obligation of any kind whatsoever arising from or in connection with this |
| Assignment or the lease unless Assignee shall elect to assume the rights and obligations of Assignor |
| under the Lease. Assignee shall make such election by mailing written notice of such election to |
| Lessor and Assignor by United States Certified Mail, duly addressed and posted or by reputable |
| overnight commercial delivery service. |
| Assignor represents and warrants to Assignee that it has full power and authority to assign the |
| Lease and its interests therein and that Assignor has not previously and is not obligated to, assign or |
| transfer any of its interests in the Lease or the premises demised thereby. |
| This Assignment is given to Assignee to secure the faithful performance by Assignor of the |
| terms and conditions of the Franchise Agreement dated the day of, |
| 20, between Assignor and Assignee (the "Franchise Agreement"). Upon a default by Assignor |
| under the Lease, a default by Assignor under the Franchise Agreement, or the expiration or |
| termination of the Franchise Agreement, Assignee shall have the right and is hereby empowered, |
| upon ten (10) days' notice to the Assignor, to assume the above-referenced Lease and take possession |
| of the premises. |
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the Assignor in the Collateral Assignment of Lease agreement is essentially the franchisee. The franchisee, as the Assignor, assigns their rights, title, and interest in the lease to Rayyan Pizza Franchise LLC, the Assignee, which is Aw. This assignment serves as collateral to ensure the franchisee, or Assignor, fulfills their obligations under the Franchise Agreement.
The Assignor represents and warrants that they have the full power and authority to assign the lease and that they have not previously assigned or transferred any interests in the lease. This means the franchisee assures Aw that they have the legal right to transfer the lease and haven't already done so to another party. The agreement specifies that upon a default by the Assignor under the lease or the Franchise Agreement, or upon the expiration or termination of the Franchise Agreement, Aw has the right to assume the lease after providing ten days' notice to the Assignor.
Furthermore, the Assignor agrees to indemnify Aw, the Assignee, for any claims, obligations, losses, damages, and taxes that occur prior to the date Aw assumes the lease. This includes covering costs incurred by Aw in defending against any claims related to this period, such as attorney's fees and litigation expenses. This Collateral Assignment of Lease remains in effect for the full term of the lease, including any renewals or extensions, and becomes null and void upon the lease's expiration. This arrangement protects Aw's interest in maintaining the location for a Papa Ray's Pizza restaurant, especially if the franchisee fails to meet their obligations.