Does the Aw franchise agreement allow for indirect damages to be claimed by either party?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.7. Limitation of Damages. Except as explicitly provided in this Agreement, for any claim concerning performance or non-performance by either party pursuant to, or in any way related to the subject matter of this Agreement, any party's sole liability, if any, shall be limited by actual damages. For any claim that arises out of or in connection with this Agreement, whether such claim is in contract, tort or otherwise, except as otherwise explicitly provided herein, under no circumstances shall either party be liable for indirect, exemplary, incidental, consequential, aggravated or punitive damages, including, but not limited to, loss of anticipated income, profits or savings, or loss resulting from business interruption.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the franchise agreement generally prohibits either party from claiming indirect, exemplary, incidental, consequential, aggravated, or punitive damages. This limitation applies to any claim arising out of or in connection with the agreement, whether the claim is in contract, tort, or otherwise. The types of damages that are waived include, but are not limited to, loss of anticipated income, profits or savings, or loss resulting from business interruption.
However, there are exceptions to this limitation. If damages are explicitly provided for in the franchise agreement, those can be claimed. Additionally, this limitation does not apply to claims under the Illinois Franchise Disclosure Act of 1987.
This means that as a prospective Aw franchisee, your potential damage recovery is limited to actual damages in most situations. You cannot seek additional compensation for indirect losses like lost profits unless explicitly stated in the agreement or protected by the Illinois Franchise Disclosure Act. Franchisees should be aware of this limitation and its implications when assessing the potential risks and rewards of investing in an Aw franchise.