Does Aw's failure to exercise a right under the franchise agreement constitute a waiver of that right?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
other under this Agreement, effective upon delivery of written notice thereof to the other or such other effective date stated in the notice of waiver. Any waiver granted by us will be without prejudice to any other rights we may have, will be subject to our continuing review, and may be revoked, in our sole discretion, at any time and for any reason, effective upon delivery to you of ten (10) days prior written notice.
Neither you nor the Company will be deemed to have waived or impaired any right, power or option reserved by this Agreement (including, without limitation, the right to demand exact compliance with every term, condition and covenant herein, or to declare any breach thereof to be a default and to terminate the Franchise prior to the expiration of its terms), by virtue of: (1) any custom or practice of the parties at variance with the terms hereof;
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, neither the franchisee nor Aw will be considered to have waived or impaired any right, power, or option reserved by the agreement due to certain factors. These factors include customs or practices that differ from the agreement's terms, any failure, refusal, or neglect by either party to exercise a right or insist on compliance with obligations, any waiver, forbearance, delay, or omission by Aw to exercise any right concerning other Papa Ray's Pizza Restaurants, or Aw's acceptance of payments from the franchisee after a breach of the agreement.
This means that even if Aw doesn't strictly enforce every term of the franchise agreement or delays in exercising its rights, it doesn't automatically give up those rights. For example, if Aw doesn't always enforce a specific operating procedure at one location, it doesn't mean they can't enforce it at another location or at a later time. Similarly, if Aw accepts a late payment, it doesn't waive its right to demand timely payments in the future or to declare a default for repeated late payments.
This clause protects Aw's ability to enforce the franchise agreement's terms in the future, even if they haven't always done so in the past. However, Aw retains the right to unilaterally waive or reduce any obligation of the franchisee under the agreement via written notice, which Aw can revoke with ten days' prior written notice. For a franchisee, this means they cannot assume that leniency or lack of enforcement in one instance will be a permanent waiver of Aw's rights.