What must an Aw franchisee do to be eligible for indemnification against third-party claims related to Mark usage?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.6 Indemnification of Franchisee. We agree to indemnify you against, and to reimburse you for, all damages (but specifically excluding any consequential damages, including, but not limited to, loss of revenue and/or profits) for which you are held liable in any proceeding brought against you by any third party arising out of your use of any Mark, so long as said use is pursuant to and in compliance with this Agreement, and for all costs you reasonably incur in the defense of any such claim in which you are named as a party, so long as you have timely notified us of the claim and have otherwise complied with this Agreement. We have the sole right to defend any such claim.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw will indemnify a franchisee against damages from third-party claims arising from the franchisee's use of Aw's marks, provided that the franchisee's use is in compliance with the franchise agreement. This indemnification specifically excludes any consequential damages, such as loss of revenue or profits.
To be eligible for indemnification, the franchisee must notify Aw promptly of any claim and comply with all other terms of the franchise agreement. Aw retains the sole right to defend any such claim. This means that franchisees must allow Aw to control the legal defense and cannot independently settle claims without Aw's consent.
This indemnification clause protects franchisees from potential legal liabilities stemming from the use of Aw's trademarks, assuming they adhere to the franchise agreement. However, it's important to note the exclusion of consequential damages, which could represent a significant financial impact in the event of a successful third-party claim. Franchisees should carefully review the franchise agreement to fully understand their obligations and the scope of Aw's indemnification.