Does the Aw franchise agreement state that violation of the non-compete covenants would result in immediate and irreparable injury to the franchisor?
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, the franchise agreement explicitly states that violating the non-compete covenants would cause immediate and irreparable harm to Aw. Because of this acknowledgment, Aw is entitled to seek an injunction against any conduct that violates the non-compete terms outlined in the agreement. The franchisee also agrees that any violation of the non-compete terms is presumed to be through unlawful use of Aw's confidential information.
This clause has significant implications for a prospective Aw franchisee. It means that if a franchisee breaches the non-compete agreement, Aw can immediately seek a court order to stop the franchisee's actions without having to prove significant monetary damages. The franchisee acknowledges this potential outcome in advance.
Furthermore, the agreement specifies that any claims the franchisee may have against Aw do not serve as a defense against the enforcement of the non-compete covenants. The franchisee is also responsible for covering all costs and expenses, including attorney and expert fees, that Aw incurs while enforcing these non-compete agreements. This could create a substantial financial burden for a franchisee found in violation.
This type of clause is relatively standard in franchise agreements, as franchisors need to protect their brand, trade secrets, and customer relationships. The agreement aims to provide Aw with strong legal recourse to prevent unfair competition from former franchisees.