Can Aw seek injunctions against franchisees for actions that may impair the goodwill associated with the Marks?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
18.3 Exceptions to Arbitration. Notwithstanding Section 18.2 above,
- (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 injunctions against franchisees in certain situations. Specifically, Aw can seek temporary and permanent injunctions and orders of specific performance in a court of competent jurisdiction to prohibit any act or omission by a franchisee or their employees that may impair the goodwill associated with the Marks. This action can be taken without Aw being required to post a bond.
This means that if a franchisee's actions or omissions are seen as damaging the reputation or goodwill of the Aw brand, Aw can take legal action to stop the franchisee. This is a fairly standard provision in franchise agreements, as franchisors need to protect their brand's image and reputation. The FDD also states that the franchisee agrees to waive any claims for damages if an injunction or specific performance order is later determined to have been issued improperly.
This clause highlights the importance of franchisees adhering to Aw's standards and operating procedures to maintain the brand's reputation. It also emphasizes the legal recourse available to Aw to protect its brand and goodwill. Prospective franchisees should understand that their actions can have legal consequences if they negatively impact the brand's image.