What is the consequence for an Aw franchisee who uses a designation of origin that falsely represents a connection with the franchisor after termination?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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 representat
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, if a franchisee continues to operate a business after the termination or expiration of the franchise agreement, they are prohibited from using any reproduction, counterfeit, copy, or colorable imitation of Aw's marks. This applies both to the operation of the new business and its promotion. The franchisee must not use any designation of origin or description that could mislead consumers into thinking there's still a connection to Aw or that could dilute Aw's exclusive rights to its marks.
This provision aims to protect Aw's brand and prevent former franchisees from unfairly capitalizing on the brand's reputation after their franchise agreement ends. It ensures that customers are not confused or deceived into believing that a terminated franchise is still part of the Aw system.
For a prospective Aw franchisee, this means understanding the restrictions on using Aw's branding and trademarks after the franchise agreement concludes. It is crucial to plan for a completely new brand identity if the franchisee intends to continue operating a similar business after the franchise term, to avoid any legal issues or potential damages for infringing on Aw's intellectual property rights.