Under the Aw franchise agreement, is Aw required to provide a reason when refusing a request from the franchisee?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
Whenever this Agreement requires our prior approval or consent, you must make a timely written request for it. Our approval or consent will not be valid unless it is in writing. .....Except where this Agreement expressly obligates us to reasonably approve or not unreasonably withhold our approval of any of your actions or requests, we have the absolute right to refuse any request by you or to withhold our approval of any action or omission by you. We make no warranties or guaranties upon which you may rely, and we assume no liability or obligation to you, by virtue of granting any waiver, approval or consent, or by reason of any neglect, delay or denial of any request for a waiver, approval or consent.
If we send a notice of nonrenewal it will state the reasons for our refusal to renew.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, Aw generally has the right to refuse any request from a franchisee without providing a reason. Specifically, unless the franchise agreement expressly states that Aw must reasonably approve or not unreasonably withhold approval, Aw has the absolute right to refuse any request or withhold approval for any action or omission by the franchisee. Aw also makes no warranties or guarantees and assumes no liability by denying any request for a waiver, approval, or consent. This broad discretion gives Aw significant control over the franchise operation.
However, there is an exception to this general rule regarding the non-renewal of a franchise agreement. If Aw decides not to renew a franchise, they are required to provide the reasons for their refusal in the notice of non-renewal. This requirement ensures that the franchisee understands the basis for the non-renewal decision, which could be important for their future business decisions and planning.
This distinction between general requests and non-renewal decisions is important for prospective Aw franchisees to understand. While Aw retains considerable discretion in day-to-day operations and approvals, they must provide a justification for the significant decision of not renewing the franchise agreement. Franchisees should carefully consider this dynamic and its potential impact on their business relationship with Aw.