Does the one-year claim limitation apply to claims by Aw against the franchisee for violation of post-termination obligations?
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 the franchisee for violation of post-termination obligations. This means Aw has more than one year to bring a claim against a franchisee who violates their obligations after the franchise agreement is terminated.
This is significant for prospective Aw franchisees because it means that Aw retains the right to pursue legal action for violations of post-termination obligations, such as breaches of non-compete agreements, even if more than one year has passed since the franchisee's actions that gave rise to the claim. This extended period to bring a claim provides Aw with more flexibility in enforcing these critical post-termination obligations.
For franchisees, this highlights the importance of fully understanding and adhering to all post-termination obligations outlined in the franchise agreement. Failure to comply with these obligations could result in legal action by Aw, even after a considerable period has elapsed since the termination of the franchise agreement. Franchisees should seek legal counsel to ensure they fully understand the scope and duration of these post-termination obligations.