Within what geographic area am I prohibited from involvement in a competing business after the Aw franchise is terminated or expires?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| n. Franchisor’s right of first refusal | Section 14.6 | We can match any offer for your business or an |
| to acquire franchisee’s business | ownership interest in you. | |
| o. Franchisor’s option to purchase franchisee’s business | Section 16.7 | We may within 30 days of termination or expiration purchase certain assets of your Papa Ray’s Pizza Restaurant at lesser of cost or fair market value. |
| p. Death or disability of franchisee | Section 14.4 | Franchise or ownership interest in you must be assigned to approved buyer within 6 months. |
| q. Non-competition covenants | Section 9.3 | No involvement in competing business |
| during the term of the franchise | anywhere. | |
| r. Non-competition covenants after the franchise is terminated or expires | Section 17.1 | No involvement in a competing business for 2 years within 20 miles of your Papa Ray’s Pizza Restaurant or of any other Papa Ray’s Pizza Restaurant (same restrictions apply after assignment). |
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, if the franchise is terminated or expires, the franchisee is prohibited from involvement in a competing business for two years. This restriction applies within a 20-mile radius of the franchisee's Papa Ray’s Pizza Restaurant or any other Papa Ray’s Pizza Restaurant. This non-compete obligation also applies after assignment of the franchise.
This means that after the franchise agreement ends, a former Aw franchisee cannot operate or be involved in a similar pizza business within that 20-mile radius. This restriction is designed to protect Aw's market share and brand recognition by preventing former franchisees from using their knowledge of the Aw system to compete against it in close proximity.
It is important to note that this restriction applies not only to the franchisee's original location but also to any other Aw location. This broadens the scope of the non-compete and could limit the franchisee's options if they wish to remain in the pizza business after leaving the Aw system. Prospective franchisees should carefully consider the implications of this non-compete clause, especially if they plan to continue working in the pizza industry after the franchise agreement ends. They should also consult with an attorney to fully understand the enforceability of the non-compete agreement in their specific jurisdiction.