In enforcing the non-compete, will a violation of the terms be presumed to be accomplished through unlawful use of Confidential Information for an Aw franchise?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
17.3 Enforcement of Covenants Not to Compete. You acknowledge that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to us for which no adequate remedy at law will be available. Accordingly, you hereby acknowledge that we may seek to obtain the entry of an injunction prohibiting any conduct by you or your Owners in violation of the terms of the covenants not to compete set forth in this Agreement. You expressly agree that it may conclusively be presumed that any violation of the terms of said covenants not to compete was accomplished by and through your unlawful use of our Confidential Information. Further, you expressly agree that the existence of any claims you may have against us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by us of the covenants not to compete set forth in this Agreement. You further agree to pay all costs and expenses (including reasonable attorneys' and experts' fees) incurred by the us in connection with the enforcement of those covenants not to compete set forth in this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw can seek an injunction against a franchisee for violating the non-compete agreement. The agreement states that any violation of the non-compete terms will be presumed to have been accomplished through the unlawful use of Aw's Confidential Information. This means that if Aw believes a franchisee is violating the non-compete agreement, the courts may assume that the franchisee is using Aw's confidential information to do so.
This presumption is a significant advantage for Aw in enforcing the non-compete agreement. It shifts the burden to the franchisee to prove that they did not use Aw's confidential information. The franchisee also agrees that any claims they may have against Aw will not be a defense against Aw enforcing the non-compete agreement.
The franchisee is also responsible for covering all costs and expenses, including reasonable attorney and expert fees, that Aw incurs while enforcing the non-compete agreement. This could potentially create a significant financial burden for the franchisee if they violate the non-compete agreement and Aw pursues legal action.