Does the one-year claim limitation apply to claims by Aw against the franchisee for intellectual property infringement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.8 Limitation of Claims. Except for claims by us against you concerning the underreporting of Gross Revenue, for non-payment of any fee due under this Agreement, intellectual property infringement/violations, claims for violation of post-termination obligations, including, but not limited to, a breach of the covenant not to compete, and for claims against you by us relating to third party claims or suits brought against us as a result of your operation of the Papa Ray's Pizza Restaurant business, any and all claims arising out of or relating to this Agreement or the relationship between or among the parties hereto shall be barred unless an arbitration or legal proceeding is commenced within one (1) year from the date the claiming party knew or should have known of the facts giving rise to such claims.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the one-year limitation of claims does not apply to claims by Aw against a franchisee for intellectual property infringement. Specifically, the franchise agreement states that any and all claims arising out of or relating to the agreement or the relationship between the parties will be barred unless an arbitration or legal proceeding is commenced within one year. However, this limitation does not apply to claims by Aw against the franchisee concerning intellectual property infringement/violations.
This means that Aw retains the right to pursue legal action against a franchisee for intellectual property infringement, even if more than one year has passed since Aw became aware of the facts giving rise to such claims. This is a significant advantage for Aw, as intellectual property is a valuable asset that needs to be protected, and the franchisor needs sufficient time to discover and act on any potential infringements.
For a prospective Aw franchisee, this clause highlights the importance of strictly adhering to the brand's intellectual property guidelines. Failure to do so could result in legal action from Aw, regardless of the one-year limitation that applies to most other types of claims. Franchisees should ensure they fully understand and comply with all intellectual property-related terms outlined in the franchise agreement and operations manual.