What provisions in the agreements are the owners of an Aw entity franchisee bound by and personally liable for?

According to Aw's 2025 Franchise Disclosure Document, if the franchisee is an entity, the owners must not only personally guarantee the obligations under the Franchise Agreement, but also agree to be bound by, and personally liable for the breach of, every provision in these agreements. This includes both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities. These obligations extend to preserving the confidentiality of Aw's confidential information as defined in the Franchise Agreement and complying with the covenants not to compete described in Item 17.

This requirement is formalized in a "Guaranty and Assumption of Obligations," which is an exhibit to the Franchise Agreement. This guaranty ensures that Aw can seek recourse directly from the owners of the franchisee entity for any failures to meet the obligations outlined in the agreement. This is a common practice in franchising, as it provides an additional layer of security for the franchisor, especially when dealing with business entities rather than individual franchisees.

Furthermore, the owners also agree to comply with Anti-Terrorism Laws. Any violation of these laws or any "blocking" of assets under these laws constitutes grounds for immediate termination of the Franchise Agreement and any other agreements with Aw or its affiliates. This provision highlights the importance Aw places on legal and ethical compliance, and the serious consequences for failing to adhere to these standards.

In practical terms, this means that the personal assets and actions of the owners are at stake if the franchise fails to meet its obligations. Prospective Aw franchisees operating as entities should carefully consider the implications of this personal liability and ensure they fully understand and can comply with all aspects of the Franchise Agreement.