What is the Aw franchisee prohibited from doing that would dilute the franchisor's exclusive rights in the Marks after termination?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.6 De-Identification of Premises. Upon termination or expiration of this Agreement, you agree, in the event you continue to operate or subsequently begin to operate any other business (subject to any restrictions against doing so provided in this Agreement), not to use any reproduction, counterfeit, copy or colorable imitation of the Marks either in connection with such other business or the promotion thereof, which is likely to cause confusion, mistake or deception, or which is likely to dilute our exclusive rights in and to the Marks and further agree not to utilize any designation of origin or description or representation which falsely suggests or represents an association or connection with us so as to constitute unfair competition.
If we do not opt to take assignment of the lease for the Premises upon the expiration or termination of this Agreement, you shall immediately make such
modifications or alterations to the Premises as may be necessary to prevent any association between us or the System and any business thereon subsequently operated by you or others, and shall make such specific additional changes thereto as we may reasonably request for that purpose, including, without limitation, removal of all distinctive physical and structural features identifying the System. In the event you fail or refuse to comply with the requirements of this Paragraph, we shall have the right to enter upon the premises, without being guilty of trespass or any other tort, for the purpose of making or causing to be made such changes as may be required at your expense, which expense you agree to pay upon demand.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to the 2025 FDD, after the termination or expiration of the Franchise Agreement, an Aw franchisee is prohibited from actions that could dilute Aw's rights to its trademarks. Specifically, if the franchisee continues to operate any other business after the agreement ends, they cannot use any reproduction, counterfeit, copy, or similar imitation of Aw's trademarks. This restriction extends to anything that might cause confusion, mistake, or deception, or that could dilute Aw's exclusive rights to its trademarks, ensuring fair competition and protecting Aw's brand identity.
Furthermore, the franchisee must not use any designation of origin, description, or representation that falsely suggests an association or connection with Aw, as this would constitute unfair competition. If Aw does not take over the lease for the premises, the franchisee must modify the location to remove any association with the Aw system. This includes removing distinctive physical and structural features that identify the Aw brand. Aw can also request specific additional changes to prevent any association with the franchise.
If the franchisee fails to comply with these requirements, Aw has the right to enter the premises and make the necessary changes at the franchisee's expense. This ensures that the brand is protected even after a franchise agreement ends, preventing any potential confusion or misuse of the Aw trademarks and brand identity. These measures are typical in franchising to maintain brand consistency and prevent former franchisees from unfairly capitalizing on the established brand recognition of the franchise system.