Are Aw franchisees able to claim loss of anticipated income, profits, or savings?
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, franchisees are generally restricted from claiming indirect, exemplary, incidental, consequential, aggravated, or punitive damages. This limitation specifically includes claims for loss of anticipated income, profits, or savings, or losses resulting from business interruption. This means that if an Aw franchisee believes they have suffered damages due to Aw's actions or inactions, their potential recovery is limited to actual damages only.
This limitation on damages is a significant factor for prospective Aw franchisees to consider. It means that even if Aw breaches the franchise agreement, the franchisee's ability to recover losses beyond direct, provable damages is limited. For example, if Aw fails to provide adequate support and the franchisee's business suffers as a result, the franchisee may not be able to recover lost profits they anticipated earning.
However, there are exceptions to this limitation. Specifically, the FDD notes that these limitations do not apply to claims arising under the Illinois Franchise Disclosure Act. This suggests that franchisees operating in Illinois may have additional rights and remedies available to them under state law.
It is important for potential Aw franchisees to carefully review the franchise agreement and understand the limitations on damages. They should also consult with an attorney to determine how these limitations may affect their rights and remedies in the event of a dispute with Aw.