Does Aw indemnify the franchisee for any reason?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
in a reasonable time after our notice to you at your expense. If we require you to modify or discontinue use of any Mark, we have no obligations or liability to you for your actual expenditures or other costs you incur in order to comply with this obligation.
- 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.
8. RELATIONSHIP OF THE PARTIES; INDEMNIFICATION
- 8.1 Independent Contractor; No Fiduciary Relationship. Both you and we understand and agree that this Agreement does not create a fiduciary relationship between us, that you and we are independent contractors, and that nothing in this Agreement is intended to make either party a general or special agent, joint venturer, partner, or employee of the other for any purpose whatsoever. You agree to conspicuously identify yourself in all your dealings with customers, suppliers, public officials, employees, and others as the owner of the Papa Ray's Pizza Restaurant pursuant to a Franchise Agreement with us, and agree to place any other notices of independent ownership on your forms, business cards, stationery, advertising, and other materials as we may require from time to time.
- 8.2 No Employment Relationship. You shall prominently display, by posting of a sign within public view, on or in the Premises, a statement that clearly indicates that the Papa Ray's Pizza Restaurant is independently owned and operated by you as our franchisee. You expressly
acknowledge that we are not your employer or an employer of any of your employees. In addition, we are not a joint employer with you.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw agrees to indemnify the franchisee under specific circumstances. Aw will indemnify a franchisee against damages for which the franchisee is held liable in proceedings brought by a third party due to the franchisee's use of Aw's marks, provided the use is compliant with the franchise agreement. This indemnification excludes consequential damages like lost revenue or profits.
For Aw to provide indemnification, the franchisee must promptly notify Aw of any claim and comply with all terms of the agreement. Aw retains the sole right to defend any such claim. This means that if a customer sues an Aw franchisee for using Aw's logo in a way that infringes on someone else's trademark, Aw will cover the damages and legal costs, excluding any indirect losses like the franchisee's lost income during the lawsuit, assuming the franchisee followed Aw's guidelines for using the logo.
However, the franchisee is responsible for indemnifying Aw in several situations. The franchisee must indemnify Aw against obligations, damages, and taxes for which Aw is held liable, as well as all costs incurred in defending claims against Aw, arising from the franchisee's operation of the Papa Ray's Pizza Restaurant or any breach of the agreement. This includes actual and consequential damages, attorney's fees, investigation costs, court costs, and travel expenses. The franchisee also agrees to indemnify Aw for costs incurred in enforcing the franchise agreement or defending actions related to the agreement, including arbitrator and attorney fees, unless legal proceedings find the franchisee compliant with the agreement.