What specific failures to comply with the Aw Agreement will result in the franchisee reimbursing Aw for costs and expenses?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
no liability for any sales, use, excise, income, gross receipts, property, or other taxes levied against you or your assets or on us in connection with the business you conduct, or any payments you make to us pursuant to this Agreement (except for our own income taxes). You agree to indemnify, defend and hold us, our shareholders, directors, officers, employees, agents and assignees, harmless against and to reimburse us for all such obligations, damages, and taxes for which we are held liable and for all costs we reasonably incur in the defense of any such claim brought against us or in any such action in which we are named as a party, arising out of your operation of the Papa Ray's Pizza Restaurant, and/or arising out of your breach of this Agreement, including without limitation actual and consequential damages, reasonable attorneys', accountants', and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses. We have the right to defend any such claim against us. You further agree to hold us harmless and indemnify and defend us for all cost, expense or loss we incur in enforcing the provisions of this Agreement, in defending our actions taken relating to this Agreement, or resulting from your breach of this Agreement, including, without limitation, reasonable arbitrators' and attorneys' fees (including those for appeal), unless, after legal proceedings are completed, you are found to have fulfilled and complied with all the terms of this Agreement. Your indemnification obligations described above will continue in full force and effect after, and notwithstanding, the expiration or termination of this Agreement.
9. CONFIDENTIAL INFORMATION; NON-COMPETITION
9.1 Types of Confidential Information. We possess certain unique confidential and proprietary information and trade secrets consisting of the following categories of information,
methods, techniques, products, and knowledge developed by us and our franchisees: (4) methods, techniques, formats, specifications, procedures, information, systems and knowledge of and experience in the development, operation, and franchising of Papa Ray's Pizza Restaurants; (2) source of supply, ordering and inventory control and methods of providing the products and services sold at Papa Ray's Pizza Restaurants; (3) recipes and methods for preparation of food products;
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, franchisees may be required to reimburse Aw for costs and expenses incurred due to specific failures to comply with the franchise agreement. If Aw has to take legal action, either in court or arbitration, to recover amounts owed by the franchisee or their affiliates, Aw is entitled to reimbursement for costs and expenses. These reimbursable expenses include reasonable accounting and legal fees, arbitration administrative charges, arbitrator's compensation, and any other related costs. This applies whether these costs are incurred before, during, or in anticipation of filing any demand, claim, action, hearing, or proceeding to enforce the obligations of the Franchise Agreement.
Furthermore, if Aw incurs expenses because the franchisee fails to pay amounts owed when due, submit reports, information, or supporting records on time, or any other failure to comply with the Franchise Agreement, the franchisee must reimburse Aw for these costs. These costs include, but are not limited to, attorneys' and accounting fees, and collection agency fees. This provision ensures that Aw is compensated for the financial burden and resources expended in addressing and rectifying the franchisee's non-compliance.
Additionally, the franchisee agrees to indemnify, defend, and hold Aw harmless against and to reimburse Aw for all obligations, damages, and taxes for which Aw is held liable. This includes all costs Aw reasonably incurs in defending any claim brought against them or in any action in which they are named as a party, arising out of the franchisee's operation of the Papa Ray's Pizza Restaurant, and/or arising out of the franchisee's breach of the Agreement. This encompasses actual and consequential damages, reasonable attorneys', accountants', and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses. The franchisee also agrees to hold Aw harmless and indemnify and defend Aw for all cost, expense or loss Aw incurs in enforcing the provisions of this Agreement, in defending Aw's actions taken relating to this Agreement, or resulting from the franchisee's breach of this Agreement, including, without limitation, reasonable arbitrators' and attorneys' fees (including those for appeal), unless, after legal proceedings are completed, the franchisee is found to have fulfilled and complied with all the terms of this Agreement.