Is Aw required to post a bond when seeking injunctive relief for violations of non-disclosure obligations?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) We are entitled, without being required to post a bond, to seek the entry of temporary and permanent injunctions and orders of specific performance in a court of competent jurisdiction to: (1) enforce the provisions of this Agreement relating to your use of the Marks and your non-disclosure and non-competition obligations under this Agreement; (2) prohibit any act or omission by you or your employees that constitutes a violation of any applicable law, ordinance or regulation, constitutes a danger to the public, or may impair the goodwill associated with the Marks or cause irreparable harm to us or the Papa Ray's Pizza franchises. You agree to waive any claims for damages in the event there is a later determination that an injunction or specific performance order was issued improperly.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw is entitled to seek temporary and permanent injunctions and orders of specific performance in a court of competent jurisdiction to enforce the provisions of the agreement relating to a franchisee's non-disclosure obligations without being required to post a bond. This means that if a franchisee violates the non-disclosure terms of the franchise agreement, Aw can pursue legal action to stop the franchisee's actions without having to provide a financial guarantee to cover potential damages to the franchisee if the injunction is later found to be unwarranted.
This waiver of the bond requirement is specifically tied to actions by Aw to enforce the franchisee's non-disclosure and non-competition obligations, as well as the franchisee's use of Aw's marks. It also applies if the franchisee violates any applicable law, ordinance, or regulation, constitutes a danger to the public, or may impair the goodwill associated with the Marks or cause irreparable harm to Aw or the Papa Ray's Pizza franchises. The franchisee also agrees to waive any claims for damages if an injunction or specific performance order is later determined to have been issued improperly.
For a prospective Aw franchisee, this clause means that Aw has a streamlined legal avenue to protect its confidential information and brand reputation. While this protects Aw, it also places the franchisee at a disadvantage, as they waive the right to claim damages if an injunction is later deemed to have been issued improperly. This is a significant point to consider, as it could limit the franchisee's recourse in the event of a dispute with Aw.