What costs will Aw reimburse a franchisee for in the defense of a claim related to the use of a Mark?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.6 Indemnification of Franchisee. We agree to indemnify you against, and to reimburse you for, all damages (but specifically excluding any consequential damages, including, but not limited to, loss of revenue and/or profits) for which you are held liable in any proceeding brought against you by any third party arising out of your use of any Mark, so long as said use is pursuant to and in compliance with this Agreement, and for all costs you reasonably incur in the defense of any such claim in which you are named as a party, so long as you have timely notified us of the claim and have otherwise complied with this Agreement. We have the sole right to defend any such claim.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw will indemnify a franchisee against damages for which the franchisee is held liable in a proceeding by a third party arising from the franchisee's use of any Mark, provided that the franchisee's use complies with the franchise agreement. Aw will also reimburse the franchisee for all costs reasonably incurred in defending such a claim in which the franchisee is named as a party.
However, this reimbursement is contingent upon the franchisee providing timely notification of the claim to Aw and otherwise complying with the franchise agreement. It's important to note that Aw retains the sole right to defend any such claim.
This indemnification specifically excludes any consequential damages, including loss of revenue and/or profits. This means that while Aw will cover direct damages and reasonable defense costs, it will not compensate the franchisee for indirect losses like lost income resulting from the claim. This is a fairly standard arrangement in franchising, where franchisors often provide support for trademark-related issues but limit their liability for consequential losses.