factual

Under the Aw franchise agreement, what happens to the franchise if the agreement terminates or expires?

Aw Franchise · 2025 FDD

Answer from 2025 FDD Document

and our agent or representative respecting any and all claims arising out of our operation of your Papa Ray's Pizza Restaurant under this Paragraph 15.4. Nothing herein shall require us to operate your Papa Ray's Pizza Restaurant when you are in default.

16. RIGHTS OF THE COMPANY AND OBLIGATIONS OF FRANCHISEE UPON TERMINATION OR EXPIRATION OF THE FRANCHISE.

  • 16.1 Payment of Amounts Owed to the Company. You agree to pay to us within ten (10) days after the effective date of termination or expiration (without renewal) of this Agreement such royalty fees, marketing fund contributions, service charges due us on any of the foregoing and all other amounts owed to us and our affiliates which are then unpaid. You must furnish a complete accounting of all such amounts owed to us and our affiliates with the payment.
  • 16.2 The Marks. You (and your Owners) agree that after the termination or expiration (without renewal) of this Agreement you will:
  • (a) not directly or indirectly at any time or in any manner identify yourself or any business as a current or former Papa Ray's Pizza Restaurant, or as a franchisee or licensee of or as otherwise associated with us, or use the Marks, any colorable imitation thereof or other indicia of a Papa Ray's Pizza Restaurant in any manner or for any purpose, or utilize for any purpose any trade name, trademark, service mark, trade dress, domain name, or other commercial symbol that suggests or indicates a connection or association with us;
  • (b) promptly return to us or destroy (whichever we specify) all signs, sign-faces, promotional and advertising materials and other materials containing the Marks or otherwise identifying or relating to a Papa Ray's Pizza Restaurant;
  • (c) promptly take such action as may be required to cancel all fictitious or assumed name, "doing business as" or equivalent registrations relating to your use of the Marks;

  • (d) promptly notify the telephone company and all listing agencies of the termination or expiration of your right to use any telephone number and any telephone directory listings associated with the Marks and to authorize transfer of same to or at our direction. You acknowledge that as between the Company and you, we have the sole right to and interest in all telephone numbers and directory listings associated with the Marks, and you authorize us, and by execution of the Exhibit 4 Collateral Assignment of Telephone Number have appointed us and any of our officers as your attorney-in-fact, to direct the telephone company and all listing agencies to transfer same to us or at its direction, should you fail or refuse to do so, and the telephone company and all listing agencies may accept such direction or this Agreement as conclusive of our exclusive rights in such telephone numbers and directory listings and its authority to direct their transfer;
  • (e) assign to us or our designee all of your right, title and interest in and to any domain name registrations, any web sites, and any listings or presence on any social media platforms or social media networks, or other presence on the internet using the Marks, including passwords and account manager access, and shall promptly notify the necessary parties of the termination of your license to use the Marks, and therefore, your right to use any domain name, website, or other presence on the internet using the Marks, and to authorize a transfer of same to us or our designee;
  • (f) furnish to us within thirty (30) days after the effective date of termination or expiration evidence satisfactory to us of your compliance with the foregoing obligations.
  • 16.3 Confidential Information. You agree that upon termination or expiration (without renewal) of this Agreement, you will immediately cease to use in any business or otherwise the Confidential Information disclosed to you pursuant to this Agreement and will return to us all copies of the Operations Manual, any proprietary software and other materials containing our proprietary information which have been loaned to you by us.
  • 16.4 Cease Operations. Upon termination or expiration of this Agreement, you shall immediately cease to operate your Papa Ray's Pizza Restaurant under this Agreement, either as a franchised or as a non-franchised facility.
  • 16.5 Assignment of Lease. Upon termination or expiration of this Agreement, at our option you shall immediately assign to us your interest in any lease then in effect for the premises of your Papa Ray's Pizza Restaurant, as you agreed to in the Exhibit 3 Collateral Assignment of Lease.
  • 16.6 De-Identification of Premises. Upon termination or expiration of this Agreement, you agree, in the event you continue to operate or subsequently begin to operate any other business (subject to any restrictions against doing so provided in this Agreement), not to use any reproduction, counterfeit, copy or colorable imitation of the Marks either in connection with such other business or the promotion thereof, which is likely to cause confusion, mistake or deception, or which is likely to dilute our exclusive rights in and to the Marks and further agree not to utilize any designation of origin or description or representation which falsely suggests or represents an association or connection with us so as to constitute unfair competition.

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

What This Means (2025 FDD)

According to Aw's 2025 Franchise Disclosure Document, several obligations and rights come into effect upon the termination or expiration of the franchise agreement. The franchisee must immediately cease operating the Papa Ray's Pizza Restaurant, whether as a franchised or non-franchised facility. The franchisee is also obligated to pay all outstanding amounts, including royalty fees, marketing fund contributions, and service charges, within ten days of termination or expiration. They must also provide a complete accounting of all amounts owed to Aw and its affiliates with their payment.

Furthermore, the franchisee is prohibited from using Aw's trademarks or any similar identifying marks. This includes refraining from identifying themselves as a current or former Papa Ray's Pizza Restaurant, franchisee, or licensee. All signs, promotional materials, and other items bearing Aw's marks must be either returned to Aw or destroyed, as specified by Aw. The franchisee must also cancel any fictitious name registrations related to the use of Aw's marks and notify the telephone company and listing agencies to transfer any telephone numbers and directory listings associated with the marks to Aw.

Aw retains the option to purchase the franchisee's assets, such as fixtures, furniture, equipment, inventory, and signs bearing the marks, at the franchisee's cost or fair market value, whichever is lower. Aw also has the option to have the franchisee assign their interest in the restaurant's lease to Aw. If Aw does not take assignment of the lease, the franchisee must modify the premises to remove any association with Aw. The franchisee must also comply with the post-term covenant not to compete outlined in Section 17 of the franchise agreement and all obligations that survive the termination or expiration of the agreement.

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.