Under what condition can Aw require the franchisee to assign their lease upon termination or expiration?

According to Aw's 2025 Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, Aw has the option to require the franchisee to assign their interest in the lease for the Papa Ray's Pizza Restaurant premises. This is contingent on the franchisee having agreed to a Collateral Assignment of Lease, as detailed in Exhibit 3 of the Franchise Agreement.

This provision ensures that Aw can maintain control over the location of the franchise even after the agreement with the franchisee ends. By securing the lease, Aw can continue operating a Papa Ray's Pizza Restaurant at that location, either with a new franchisee or under direct management. This protects Aw's brand presence and customer base in that area.

For a prospective franchisee, this means that the lease agreement for the premises is a critical aspect of the franchise arrangement. The franchisee must understand the terms of the Collateral Assignment of Lease and the conditions under which Aw can exercise its option to take over the lease. This could have significant implications for the franchisee's ability to continue operating a business at the same location after the franchise agreement expires or is terminated. The franchisee should seek legal counsel to fully understand the implications of this clause before signing the Franchise Agreement.