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What section of the Aw franchise agreement addresses post-term covenants not to compete?

Aw Franchise · 2025 FDD

Answer from 2025 FDD Document

[Item 22: CONTRACTS]

17. POST-TERM COVENANT NOT TO COMPETE.

  • 17.1 Covenant Not To Compete. Upon assignment, termination or expiration (without renewal) of this Agreement, you (and your Owners) agree that for a period of two (2) years, commencing on the effective date of assignment, termination or expiration, or the date on which you begin complying with the covenants herein, whichever is later, you (and your Owners) will not:
  • (a) have any direct or indirect interest as an owner, investor, partner, director, officer, employee, consultant, representative or agent, or in any other capacity, in (a) any restaurant business selling products or services substantially similar to a Papa Ray's Pizza Restaurant concept then being offered by us (except other Papa Ray's Pizza Restaurants you are operating pursuant to franchise agreements with us), which is located (i) within ten (10) miles of the Premises of your Papa Ray's Pizza Restaurant or (i) within ten (10) miles of the premises of any other Papa Ray's Pizza Restaurant,


  • or (b) any entity which is granting franchises or licenses or entering into joint venture relationships for any restaurant business which offers products or services similar to those offered by a Papa Ray's Pizza Restaurant, other than the ownership of securities traded on a stock exchange or on the over-the-counter market that represent 5% or less of that class of securities.
  • (b) directly or indirectly divert or attempt to divert any former business or customer of your Papa Ray's Pizza Restaurant to any competitive business;
  • (c) employ or seek to employ any person employed by us or our affiliate, or otherwise directly or indirectly induce or seek to induce such person to leave his or her employment; and
  • (d) directly or indirectly, solicit or sell products or services to any former customer of your Papa Ray's Pizza Restaurant.
  • 17.2 Court Modification of Agreement. You agree that this form of Agreement is prepared for use in many jurisdictions with differing public policies and that such public policies change. Accordingly, you agree that the prevailing non-competition restrictions set forth above may be modified by a Court to the extent necessary to make the non-competition agreements valid and enforceable against you.
  • 17.3 Enforcement of Covenants Not to Compete. You acknowledge that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to us for which no adequate remedy at law will be available. Accordingly, you hereby acknowledge that we may seek to obtain the entry of an injunction prohibiting any conduct by you or your Owners in violation of the terms of the covenants not to compete set forth in this Agreement. You expressly agree that it may conclusively be presumed that any violation of the terms of said covenants not to compete was accomplished by and through your unlawful use of our Confidential Information. Further, you expressly agree that the existence of any claims you may have against us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by us of the covenants not to compete set forth in this Agreement. You further agree to pay all costs and expenses (including reasonable attorneys' and experts' fees) incurred by the us in connection with the enforcement of those covenants not to compete set forth in this Agreement.

Source: Item 22 — CONTRACTS (FDD pages 39–40)

What This Means (2025 FDD)

According to Aw's 2025 Franchise Disclosure Document, Section 17 of the franchise agreement outlines the post-term covenant not to compete. This section is found within Item 22, which covers all contracts related to the franchise agreement.

Specifically, Section 17.1 details the covenant not to compete, stating that upon termination or expiration of the agreement, the franchisee and their owners agree not to have any direct or indirect interest in a restaurant business selling similar products or services to Aw's Papa Ray's Pizza Restaurant concept for two years. This restriction applies within ten miles of the franchisee's former location or any other Papa Ray's Pizza Restaurant.

Section 17.2 acknowledges that the agreement is prepared for use in various jurisdictions and allows for court modification of the non-competition restrictions to ensure they are valid and enforceable. Section 17.3 emphasizes that violating the non-compete agreement would cause immediate and irreparable harm to Aw, allowing them to seek an injunction and recover all costs and expenses, including attorney's fees, associated with enforcing the covenant.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.