What constitutes a 'prevailing party' in an action to enforce the Afuri Ramen Dumpling agreement?

According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the prevailing party in any arbitration, insolvency, bankruptcy proceeding, suit, or action to enforce the Franchise Agreement is defined as the party who recovers the greater relief in the proceeding. This definition is important because the prevailing party is entitled to recover their arbitration, proceeding, and court costs, as well as reasonable attorneys' fees. These costs and fees will be determined by the arbitration, proceeding, or court, and include costs and attorneys' fees incurred during any appeals or reviews of the decision.

For a prospective Afuri Ramen Dumpling franchisee, this means that if a dispute arises with the franchisor and leads to legal action, the franchisee could be responsible for covering Afuri Ramen Dumpling's legal costs if Afuri Ramen Dumpling prevails in court. Conversely, if the franchisee wins the case and obtains greater relief, Afuri Ramen Dumpling would be responsible for covering the franchisee's legal costs. This creates a financial risk for both parties involved in the franchise agreement.

It is important to note that the determination of who is the 'prevailing party' is based on who obtains the greater relief, not necessarily who wins on every single issue in the dispute. This can lead to complex calculations and arguments over which party truly achieved the most favorable outcome. Prospective franchisees should carefully consider this clause and understand the potential financial implications before entering into a franchise agreement with Afuri Ramen Dumpling.