Is Aw liable for any agreements, representations, or warranties made by the franchisee that are not expressly authorized under the Franchise Agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
We will not assume any liability or be deemed liable for any agreements, representations, or warranties you make that are not expressly authorized under this Agreement, nor will we be obligated for any damages to any person or property, directly or indirectly arising out of your operation of your Papa Ray's Pizza Restaurant business, whether or not caused by your negligent or willful action or failure to act.
We will have no liability for any sales, use, excise, income, gross receipts, property, or other taxes levied against you or your assets or on us in connection with the business you conduct, or any payments you make to us pursuant to this Agreement (except for our own income taxes).
You agree to indemnify, defend and hold us, our shareholders, directors, officers, employees, agents and assignees, harmless against and to reimburse us for all such obligations, damages, and taxes for which we are held liable and for all costs we reasonably incur in the defense of any such claim brought against us or in any such action in which we are named as a party, arising out of your operation of the Papa Ray's Pizza Restaurant, and/or arising out of your breach of this Agreement, including without limitation actual and consequential damages, reasonable attorneys', accountants', and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses.
We have the right to defend any such claim against us.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw will not be held liable for any agreements, representations, or warranties that a franchisee makes if those actions are not expressly authorized by the Franchise Agreement. This means that franchisees must operate strictly within the bounds of the agreement and cannot make independent deals or promises on behalf of Aw unless specifically permitted.
This provision protects Aw from unauthorized commitments made by franchisees. If a franchisee makes an agreement that is outside the scope of the Franchise Agreement, Aw is not obligated to honor it. This also extends to damages arising from the operation of the franchisee's Papa Ray's Pizza Restaurant; Aw is not liable for damages to any person or property resulting from the franchisee's actions, whether negligent or willful.
Furthermore, the franchisee is responsible for indemnifying, defending, and holding Aw harmless from any liabilities, damages, or taxes for which Aw is held liable due to the franchisee's actions or breach of the Franchise Agreement. This includes covering all costs Aw incurs in defending against any claims, including attorney's fees, investigation costs, and litigation expenses. This underscores the importance of franchisees adhering strictly to the Franchise Agreement to avoid potential legal and financial repercussions for both themselves and Aw.