Does Aw assume liability for taxes levied against the franchisee's assets under the Aw franchise agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
We will not assume any liability or be deemed liable for any agreements, representations, or warranties you make that are not expressly authorized under this Agreement, nor will we be obligated for any damages to any person or property, directly or indirectly arising out of your operation of your Papa Ray's Pizza Restaurant business, whether or not caused by your negligent or willful action or failure to act.
We will have no liability for any sales, use, excise, income, gross receipts, property, or other taxes levied against you or your assets or on us in connection with the business you conduct, or any payments you make to us pursuant to this Agreement (except for our own income taxes).
You agree to indemnify, defend and hold us, our shareholders, directors, officers, employees, agents and assignees, harmless against and to reimburse us for all such obligations, damages, and taxes for which we are held liable and for all costs we reasonably incur in the defense of any such claim brought against us or in any such action in which we are named as a party, arising out of your operation of the Papa Ray's Pizza Restaurant, and/or arising out of your breach of this Agreement, including without limitation actual and consequential damages, reasonable attorneys', accountants', and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses.
We have the right to defend any such claim against us.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw does not assume liability for taxes levied against the franchisee or their assets. Specifically, Aw will not be liable for any sales, use, excise, income, gross receipts, property, or other taxes levied against the franchisee or their assets. This also applies to taxes levied against Aw in connection with the business the franchisee conducts, or any payments the franchisee makes to Aw under the Franchise Agreement, with the exception of Aw's own income taxes. This means the franchisee is solely responsible for all taxes related to their Aw business.
Furthermore, the franchisee agrees to indemnify, defend, and hold Aw harmless against any such obligations, damages, and taxes for which Aw is held liable. This includes reimbursing Aw for all costs reasonably incurred in defending any claim brought against them arising out of the franchisee's operation of the Papa Ray's Pizza Restaurant or any breach of the Franchise Agreement. These costs can include actual and consequential damages, reasonable attorneys', accountants', and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses.
This arrangement is typical in franchising, where franchisees are considered independent business owners responsible for their own financial obligations, including taxes. The franchisee's obligation to indemnify Aw protects the franchisor from liabilities arising from the franchisee's business operations and ensures that Aw does not bear the financial burden of the franchisee's tax obligations or any related legal claims.