Under what conditions will Aw approve a transfer by a franchisee?
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, Aw has the right to approve all transfers of a franchise, but will not unreasonably withhold approval, except for transfers to an entity controlled by the franchisee. A transfer to an entity is effective 30 days after notice is given to Aw, provided the franchisee signs Aw's assignment agreement and all owners guarantee the entity's franchise agreement obligations.
Aw outlines specific conditions that must be met for transfer approval. The franchisee must have complied with the Franchise Agreement during its term and paid all amounts due to Aw and its affiliates. The transferee must qualify and complete training. The lessor must consent to the lease assignment. The transferee must assume the existing agreement or sign a new agreement for the remainder of the term, at Aw's option.
Additionally, the franchisee must pay a transfer fee and sign a general release along with their owners. Aw must approve the terms of the transfer, and the franchisee must subordinate the buyer's debt to the franchisee to Aw's interest in the franchise business. Finally, either the franchisee or the transferee must remodel the restaurant premises.