Does the Principal Owner's Guaranty for Augusta Lawn Care cover arbitration filing fees?
Augusta_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
If legal action or arbitration is necessary, including any motion to compel arbitration, or action on appeal, to enforce the terms and conditions of this Agreement, or for violation of this Agreement, Augusta Lawn Care will be entitled to recover reasonable compensation for preparation, investigation costs, court costs, arbitral costs, and reasonable accountants, attorneys, attorneys' assistants, and expert witness fees incurred by Augusta Lawn Care. Further, if Augusta Lawn Care is required to engage legal counsel in connection with any failure by You to comply with this Agreement, You shall reimburse Augusta Lawn Care for any of the above-listed costs and expenses incurred by Augusta Lawn Care, regardless of whether Augusta Lawn Care files or compels mediation, arbitration or litigation.
Source: Item 23 — RECEIPTS (FDD pages 44–184)
What This Means (2025 FDD)
According to the 2025 Augusta Lawn Care FDD, if legal action or arbitration becomes necessary to enforce the franchise agreement, Augusta Lawn Care is entitled to recover reasonable compensation for preparation, investigation costs, court costs, arbitral costs, and reasonable accountants, attorneys, attorneys' assistants, and expert witness fees incurred by Augusta Lawn Care.
Furthermore, if Augusta Lawn Care needs to engage legal counsel due to a franchisee's failure to comply with the agreement, the franchisee is responsible for reimbursing Augusta Lawn Care for the aforementioned costs and expenses, regardless of whether Augusta Lawn Care initiates or compels mediation, arbitration, or litigation. This suggests that the financial burden of arbitration, including filing fees and associated costs, could potentially fall on the franchisee if they are found to be in breach of the agreement.
While the FDD excerpt does not explicitly state that the Principal Owner's Guaranty covers arbitration filing fees, it does indicate that the principal may be required to guarantee the performance of all obligations under the franchise agreement in writing. Therefore, it is important for a prospective franchisee to clarify with Augusta Lawn Care whether the Principal Owner's Guaranty extends to covering arbitration-related expenses and under what specific circumstances such coverage would apply.