factual

Does the Aw agreement specify that all claims must be arbitrated?

Aw Franchise · 2025 FDD

Answer from 2025 FDD Document

commenced until the earlier of thirty (30) days from the selection of the Mediator, or the mutual agreement by both parties that mediation has been unsuccessful, or if the notified party fails to respond to the

requesting party within thirty (30) days of the delivery of notice requesting mediation. The parties will share equally all fees and expenses of the mediator.

18.2 Arbitration. Except to the extent we elect to proceed by judicial process as provided in Paragraph 18.3 below, any controversy, dispute, claim or question arising out of, in connection with, or in relation to this Agreement or its interpretation, performance, or any breach thereof, which cannot be settled amicably between the parties shall be determined solely and exclusively by arbitration with venue in Chicago, Illinois and shall be heard by one arbitrator that has specific franchise experience in accordance with the then existing commercial Rules of the American Arbitration Association ("Rules"). The parties hereby agree that arbitration shall be conducted on an individual, not a class-wide basis, and that an arbitration proceeding between us shall not be consolidated with any other arbitration proceeding involving us and any non-party to this Agreement, including other franchisees. Judgment upon any award, which may include an award of damages, may be entered in the courts of Cook County, Illinois, in the court of any jurisdiction in which you are located, or in any other court having jurisdiction thereof.

The arbitration rules provided for herein shall apply, and the arbitration may proceed, and the arbitrator has jurisdiction, regardless of whether any party fails to actively participate or appear. In the event that any party fails without good cause (i) to appear at any properly noticed arbitration proceeding; or (ii) to make payment in full of its share of the required arbitration fees and costs within ten (10) days after notice and demand, absent a previously issued court order to the contrary, then the arbitrator or the organization/entity administering the arbitration shall be authorized to enter a final award against such party, notwithstanding the failure to appear or to make the required payment.

18.3 Exceptions to Arbitration. Notwithstanding Section 18.2 above,

  • (a) We are entitled, without being required to post a bond, to seek the entry of temporary and permanent injunctions and orders of specific performance in a court of competent jurisdiction to: (1) enforce the provisions of this Agreement relating to your use of the Marks and your non-disclosure and non-competition obligations under this Agreement;

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

What This Means (2025 FDD)

According to Aw's 2025 Franchise Disclosure Document, not all claims are subject to mandatory arbitration. While the agreement mandates mediation as a first step for most disputes, Aw retains the option to pursue certain legal actions through judicial processes instead of arbitration.

Specifically, Aw can seek injunctions or specific performance orders in court to enforce provisions related to trademark usage, non-disclosure, and non-competition obligations. This allows Aw to quickly address actions by a franchisee that could harm the brand or violate the agreement's terms. Additionally, Aw can pursue judicial processes to enforce a franchisee's payment obligations under Section 10 of the agreement, allowing them to directly seek collection of fees owed.

The FDD specifies that all matters relating to arbitration shall be governed by the Federal Arbitration Act. Franchisees also agree to waive trial by jury in any action, proceeding, or counterclaim brought by either party. However, franchisees should be aware of the exceptions that allow Aw to pursue certain claims in court, potentially leading to a different legal process and venue than arbitration.

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.