Does Aw's failure to insist upon exact compliance by the franchisee constitute a waiver under the Aw franchise agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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; (2) any failure, refusal or neglect of either of us to exercise any right under this Agreement or to insist upon exact compliance by the other with its obligations hereunder, including, without limitation, any mandatory specification, standard or operating procedure; (3) any waiver, forbearance, delay, failure or omission by us to exercise any
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw's failure to insist on strict compliance by a franchisee does not constitute a waiver of Aw's rights under the franchise agreement. This means that even if Aw does not always enforce every single term, condition, and covenant in the agreement, Aw still retains the right to demand strict compliance in the future.
Specifically, the franchise agreement states that Aw is not deemed to have waived or impaired any right, power, or option reserved by the agreement simply because of (1) any custom or practice of the parties that differs from the agreement's terms, (2) any failure, refusal, or neglect by Aw to exercise any right or insist on exact compliance, including mandatory specifications, standards, or operating procedures, (3) any waiver, forbearance, delay, failure, or omission by Aw regarding other Papa Ray's Pizza Restaurants, or (4) Aw's acceptance of payments from the franchisee after a breach of the agreement.
This provision is important for prospective franchisees to understand because it means that Aw has significant leeway in how strictly it enforces the franchise agreement. Even if Aw has been lenient in the past, it can still demand strict compliance at any time. This could potentially lead to unexpected costs or operational changes for the franchisee if Aw suddenly decides to enforce a previously unenforced provision. Franchisees should be aware of all the terms of the franchise agreement and ensure they are in compliance, regardless of Aw's past enforcement practices.
This type of clause is relatively common in franchise agreements, as it protects the franchisor's right to enforce its standards and protect its brand. However, it also places a greater burden on the franchisee to understand and comply with all aspects of the agreement, even those that may not be actively enforced.