Does Aw indemnify franchisees for damages if the use of the Mark is not in compliance with the Franchise Agreement?
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 franchisees 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 extends to all damages the franchisee is held liable for, excluding consequential damages like lost revenue or profits. Aw will also cover the franchisee's reasonable costs in defending such claims if they are promptly notified and comply with the agreement.
However, this protection is conditional. The franchisee must use the marks according to the franchise agreement's terms. Unauthorized use of the marks infringes on Aw's rights. The franchisee cannot challenge the validity or ownership of Aw's marks or take actions that harm Aw's rights to those marks.
Aw retains the sole right to defend any claim related to the use of its marks. This means that while Aw will cover certain damages and defense costs, they also control the legal strategy. Franchisees need to be aware of these conditions and ensure their use of Aw's marks aligns with the franchise agreement to benefit from this indemnification.