What specific conditions must an Aw franchisee meet to be indemnified against damages from a claim arising out of the use of any mark?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
We are not required to protect your use of the Marks or to defend you against a claim against your use of the Marks, although we have the right to defend the claim if we so choose to do so. We will indemnify you against, and reimburse you for all damages (except for any consequential damages, including loss of revenue and/or profits) for which you are held liable, and for all costs you reasonably incur in the defense of any claim in which you are named as a party, in any proceeding brought against you by any third party arising out of your use of any Mark, so long as your use of the Marks was in compliance with the Franchise Agreement and our rules and you have timely notified us of the claim or proceeding.
Source: Item 13 — TRADEMARKS (FDD pages 30–32)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw is not required to protect a franchisee's use of its trademarks or defend against claims arising from that use, but Aw does retain the right to defend such claims if it chooses. However, Aw will indemnify a franchisee against damages and costs from third-party claims arising from the franchisee's use of Aw's marks if certain conditions are met. Specifically, Aw will cover all damages for which the franchisee is held liable, as well as all reasonable costs incurred in defending against the claim. Note that this excludes any consequential damages, such as lost revenue or profits.
To be eligible for indemnification, the franchisee's use of the marks must be in compliance with both the Franchise Agreement and Aw's rules. This means the franchisee must adhere to all guidelines and standards set forth by Aw regarding trademark usage, as detailed in the agreement and any operational manuals. Additionally, the franchisee must promptly notify Aw of any claim or proceeding related to the use of the marks. This timely notification is crucial for Aw to take appropriate action and provide the necessary support.
In practical terms, this means an Aw franchisee needs to be diligent in following all brand standards and guidelines related to trademark usage. They should ensure that their marketing materials, signage, and overall business operations align with Aw's requirements. Furthermore, they must maintain open communication with Aw and immediately report any potential trademark infringement or legal claims. By adhering to these conditions, franchisees can protect themselves from potential financial liabilities and legal costs associated with trademark disputes, within the bounds of Aw's indemnification policy.