When transferring my Aw franchise, is there a requirement to remodel the restaurant premises?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION | SUMMARY |
|---|---|---|
| IN FRANCHISE AGREEMENT | ||
| k. "Transfer" by franchisee – definition | Section 14.2. | Includes transfer of any interest in Franchise Agreement, Papa Ray's Pizza Restaurant or a substantial portion of its assets or ownership change in franchisee. |
| l. Franchisor approval of transfer by franchisee | Sections 14.2 and 14.3 | Except for transfer to entity controlled by you, we have right to approve all transfers, but will not unreasonably withhold approval. Transfer to an entity is effective upon 30 days' notice to us once you sign our assignment agreement and all owners guaranty the franchise agreement obligations of the entity. |
| m. Conditions for franchisor approval of transfer | Section 14.3. | You have complied with Franchise Agreement during the term, all amounts due us and our affiliates are paid, transferee qualifies and completes training, lessor consents to lease assignment, transferee assumes your agreement or signs new agreement for remainder of term (at our option), transfer fee paid, general release signed by you and your owners, we approve terms of transfer and you subordinate buyer's debt to you to our interest in franchise business, and you or transferee remodel the restaurant premises (see also r below). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 34–36)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, remodeling the restaurant premises may be required as a condition for transfer approval. Specifically, Item 17 outlines the conditions for franchisor approval of a transfer, stating that either the franchisee or the transferee may be required to remodel the restaurant premises.
This requirement is detailed within Section 14.3 of the Franchise Agreement, which prospective franchisees should review carefully. The franchisor retains the right to ensure that the Aw location meets current brand standards upon transfer. This could involve significant costs for either the seller (franchisee) or the buyer (transferee), depending on the negotiated terms of the transfer agreement.
It is important for potential franchisees to understand that the obligation to remodel can impact the financial aspects of transferring the franchise. Franchisees planning to sell their Aw location should factor in potential remodeling costs when determining the sale price and negotiating with potential buyers. Similarly, those looking to acquire an existing Aw franchise should assess the current condition of the restaurant and estimate potential remodel expenses to ensure the investment aligns with their financial capabilities. Consulting with Aw and carefully reviewing the franchise agreement is essential to fully understand these obligations.