What costs are the franchisee responsible for if Aw seeks enforcement after termination of the Franchise Agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
n shall be binding. If we elect to exercise any option to purchase herein provided we shall have the right to set off all amounts due from you under this Agreement, and the cost of the appraisal, if any, against any payment therefore.
- 16.8 Covenants. Upon termination or expiration of this Agreement, you shall comply with the covenants contained in Section 17 of this Agreement.
- 16.9 Costs of Enforcement. You agree to pay to us all costs and expenses, including reasonable attorneys' fees and costs, incurred by us subsequent to the termination or expiration of this Agreement in obtaining injunctive or other relief for the enforcement of any provisions of this Section 16.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, a franchisee is responsible for specific costs and expenses if Aw seeks enforcement after the termination or expiration of the Franchise Agreement. Specifically, the franchisee must pay all costs and expenses, including reasonable attorneys' fees and costs, incurred by Aw to obtain injunctive or other relief for the enforcement of any provisions within Section 16 of the agreement. This section likely covers obligations related to ceasing operations and protecting Aw's brand and confidential information.
Additionally, the franchisee agrees to indemnify, defend, and hold Aw harmless for all costs, expenses, or losses Aw incurs in enforcing the provisions of the agreement, defending actions taken relating to the agreement, or resulting from the franchisee's breach of the agreement. This includes reasonable arbitrators' and attorneys' fees, including those for appeal, unless legal proceedings determine that the franchisee fulfilled and complied with all terms of the agreement.
These provisions mean that a franchisee could face significant financial burdens if they fail to comply with the terms of the Franchise Agreement, particularly after termination. The franchisee's responsibility extends to covering Aw's legal costs, which can quickly escalate depending on the complexity and duration of any legal proceedings. It is important to note that the franchisee is liable for these costs unless they are ultimately found to have fully complied with the agreement, placing the financial risk of enforcement primarily on the franchisee.