Does Aw have any obligation to cover a franchisee's expenditures if the franchisee is required to modify or discontinue use of any Mark?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.5 Discontinuance of Use of Marks. If it becomes advisable at any time, in our sole discretion, for you to modify or discontinue use of any Mark or for your Papa Ray's Pizza Restaurant to use one or more additional or substitute trademarks, service marks, trade dress or domain names, you agree to comply with our directions to modify or otherwise discontinue the use of the Mark, or use one or more additional or substitute trademarks, service marks, trade dress or domain names, within 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.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw bears no obligation or liability for a franchisee's expenditures if they are required to modify or discontinue the use of any Mark. The FDD states that if Aw requires a franchisee to modify or discontinue using a Mark, the franchisee must comply at their own expense.
This means that if Aw decides to change its branding or requires franchisees to update their signage, marketing materials, or other branded items, the franchisee will be responsible for covering the costs associated with these changes. These costs could include new signage, updated marketing materials, legal fees, and any other expenses incurred to comply with Aw's directives.
However, Aw does agree to indemnify the franchisee against damages and reimburse costs if a third party brings a proceeding against the franchisee arising out of their use of any Mark, provided that the franchisee's use was compliant with the agreement and they notified Aw of the claim in a timely manner. This indemnification specifically excludes any consequential damages, such as loss of revenue or profits. Aw also retains the sole right to defend any such claim.