We've had this issue with a local university that sends out a lot of RFPs for small jobs, all with that requirement. In their case they also explicitly state that the AutoCAD drawings must follow their CAD standards. They provide the standards - on everything from file naming, layers, how doors must be numbered, etc.
Basically that's a requirement of the project, and everybody who submits a proposal knows it upfront. So the options are:
1. acquire and work in AutoCAD for that project - or work in your software of choice until the end, then do a conversion to AutoCAD.
2. Outsource the firm's CAD drawings to someone who can take our .dwgs and put them into AutoCAD, using the required standard, at the end of the project
3. Don't submit a proposal in the first place

We've used option #2 on the projects we've done with them. It works ok, but you have to budget in the time to verify that the converted drawings have not changed in any way that affects intent.

Option #1 may be the better solution on a large project.

Talking with the fanchiser's tech person directly is definitely a good idea. If it turns out that they really do want AutoCAD drawings and you're not able to provide them thru methods 1 or 2 above then you should pass on the project.

try intelliCAD that writes better DWG than vectorworks i would imagine at least to check the compatibility

"saved-as" versions, such as dwg when opened in ACAD will do just fine with a few steps to rename layers and explode objects. They can't tell the difference so don't mention it. I see where the client is coming from - they want to avoid incompatibility issues with an archived set by using an industry standard format. They don't get to tell you how to make your drawings, but they can tell you the format it needs to be in when they get it. Make it so they can't tell the difference.

they will be able to tell a warning will come up that says 'this is not a autodesk certified DWG file' autodesk is getting sued by the open design alliance for this and i expect them to loose just like they did on the first sale case vs the ebay seller.

just tell them to say do not show again and be honest about that you do not use autocad and maybe say why. assuring them it is ok also mentioning the lawsuits against autodesk.

Nah, just say "I don't know why it says that, we used Autocad, maybe your version is bootleg"

Thanks for ideas. As a follow-up , here's what we did. I duly inquired with prospect but received no answer, indicating that she was either not serious or had enough others ready to roll that this was a non-issue for her.

In answer to formerlyunknown, we will upgrade our old version of A-CAD at some point (meaning a hardware upgrade, as our sole surviving Windows machine is getting old), for the reasons illustrated in this thread. However, for a small firm, this is quite an expense and requires sufficient demand; the conversion route is preferable, as I have access to design & architecture students who need experience, and we can provide the guidance for this, but prefer to work in our chosen CAD package most of the time. One of them in fact uses Intellicad, but several use AutoCAD. As noted, I would include that cost in our fee.

This was a good screening question for a client, since a non-answer — as opposed to a "no" — indicates a less communicative client. She didn't answer my query, but would not provide contact info for her franchiser's technical office so I could discover exactly what their standards were. Thus, we ended up following formerlyunknown's option #3.

I suspect the franchiser might have been more flexible than the prospect indicated, since they probably get drawings from many different designers; I've found that to be the case in the past, but would necessarily verify before signing agreement with client.

Antisthenes' comment about the open design alliance is interesting, as it is to our profession's benefit to be able to transfer between CAD providers with minimal effort.