Does the one-year claim limitation apply to claims by Aw against the franchisee for non-payment of fees?
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 non-payment of fees. Specifically, the franchise agreement states that the one-year limitation does not apply to claims by Aw against the franchisee concerning the underreporting of Gross Revenue, for non-payment of any fee due under the 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.
This means that Aw has more than one year to bring a claim against a franchisee for these specific issues. For a prospective franchisee, this is an important consideration, as it means that Aw can pursue legal action for non-payment of fees even after a year has passed since the franchisee knew or should have known about the facts giving rise to the claim. This extended period to bring a claim only applies to Aw and not the franchisee.
It is important for a prospective Aw franchisee to understand the implications of this clause and to seek legal advice to fully understand their rights and obligations under the franchise agreement. Franchisees should ensure they have a clear understanding of all fees due under the agreement and maintain accurate records of their payments to avoid any potential disputes with Aw.