Can Aw seek an injunction against a franchisee who violates the post-term covenant not to compete?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
urt Modification of Agreement.** You agree that this form of Agreement is prepared for use in many jurisdictions with differing public policies and that such public policies change. Accordingly, you agree that the prevailing non-competition restrictions set forth above may be modified by a Court to the extent necessary to make the non-competition agreements valid and enforceable against you.
- 17.3 Enforcement of Covenants Not to Compete. You acknowledge that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to us for which no adequate remedy at law will be available. Accordingly, you hereby acknowledge that we may seek to obtain the entry of an injunction prohibiting any conduct by you or your Owners in violation of the terms of the covenants not to compete set forth in this Agreement. You expressly agree that it may conclusively be presumed that any violation of the terms of said covenants not to compete was accomplished by and through your unlawful use of our Confidential Information. Further, you expressly agree that the existence of any claims you may have against us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by us of the covenants not to compete set forth in this Agreement. You further agree to pay all costs and expenses (including reasonable attorneys' and experts' fees) incurred by the us in connection with the enforcement of those covenants not to compete set forth in this Agreement.
18. DISPUTE RESOLUTION
18.1 Mandatory Mediation. Except for actions pursuant to Paragraph 18.3 below, prior to the initiation of arbitration or litigation by either party pursuant to this Agreement, the parties must make a good faith effort to resolve any controversies between them by non-binding mediation either through a mutually acceptable mediator or through an established mediation service selected by us (in either case, "Mediator"). Prior to mediation, each party involved in mediation shall sign the standard confidentiality agreement reasonably required by Mediator or a confidentiality agreement reasonably required by us if the Mediator does not have a standard confidentiality agreement.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw can seek an injunction against a franchisee who violates the post-term covenant not to compete. The FDD states that a violation of the covenants not to compete would result in immediate and irreparable injury to Aw, for which no adequate remedy at law would be available. Therefore, Aw may seek an injunction prohibiting any conduct by the franchisee or their Owners that violates the terms of the covenants not to compete.
The franchisee acknowledges that any violation of the non-compete terms may be presumed to be through unlawful use of Aw's confidential information. The existence of any claims the franchisee may have against Aw does not constitute a defense against the enforcement of the covenants not to compete. The franchisee also agrees to pay all costs and expenses, including reasonable attorneys' and experts' fees, incurred by Aw in enforcing these covenants.
Additionally, Aw is entitled, without needing to post a bond, to seek temporary and permanent injunctions and orders of specific performance in a court of competent jurisdiction. This is to enforce the provisions of the Agreement relating to the franchisee's use of the Marks and their non-disclosure and non-competition obligations. The franchisee agrees to waive any claims for damages if it is later determined that an injunction or specific performance order was issued improperly. This indicates that Aw has strong legal recourse to prevent franchisees from competing unfairly after the termination or expiration of the franchise agreement.