Does having a claim against Aw prevent the enforcement of the post-term covenant not to compete?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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 existence of any claims a franchisee may have against Aw does not constitute a defense against Aw enforcing the covenants not to compete. This means that even if a franchisee believes Aw has wronged them, they are still obligated to adhere to the non-compete agreement.
This clause is significant for prospective Aw franchisees because it limits their ability to challenge the enforcement of the non-compete agreement based on claims they might have against the franchisor. Essentially, a franchisee cannot argue that they should be released from the non-compete obligations because Aw breached the franchise agreement or otherwise harmed them.
Aw retains the right to seek an injunction prohibiting any conduct that violates the terms of the covenants not to compete. Furthermore, the franchisee is responsible for covering all costs and expenses, including reasonable attorneys' and experts' fees, incurred by Aw in enforcing these covenants. This could create a financial burden for franchisees who violate the non-compete agreement, as they may be liable for Aw's legal expenses in addition to any other damages.