For an Aw franchise, what happens if the franchisee violates the covenants not to compete?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.2 Court Modification of Agreement. You agree that this form of Agreement is prepared for use in many jurisdictions with differing public policies and that such public policies change. Accordingly, you agree that the prevailing non-competition restrictions set forth above may be modified by a Court to the extent necessary to make the non-competition agreements valid and enforceable against you.
- 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, if a franchisee violates the covenants not to compete, Aw may seek an injunction prohibiting the franchisee from continuing the violating conduct. This means Aw can take legal action to immediately stop the franchisee from engaging in competitive activities that breach the franchise agreement.
Aw states that a violation of the non-compete covenants would result in immediate and irreparable harm for which monetary compensation would not be adequate. Because of this, Aw can seek an injunction against the franchisee or their owners. The FDD states that any violation of the non-compete terms can be presumed to be accomplished through unlawful use of Aw's confidential information.
Furthermore, the existence of any claims the franchisee may have against Aw does not serve as a defense against Aw enforcing the non-compete agreements. The franchisee is also responsible for covering all costs and expenses, including reasonable attorney and expert fees, incurred by Aw in enforcing these non-compete covenants.
The agreement also states that the non-competition restrictions may be modified by a court to the extent necessary to make the non-competition agreements valid and enforceable against the franchisee.