Under what circumstances is Augusta Lawn Care entitled to recover compensation for preparation, investigation costs, court costs, arbitral costs, and professional fees in legal action or arbitration?
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 Franchise Disclosure Document, 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 if legal action or arbitration is necessary to enforce the terms and conditions of the agreement, or for violation of the agreement. This includes any motion to compel arbitration, or action on appeal.
Furthermore, Augusta Lawn Care can recover these costs and expenses if they are required to engage legal counsel due to the franchisee's failure to comply with the agreement, regardless of whether Augusta Lawn Care initiates mediation, arbitration, or litigation. This means that even if Augusta Lawn Care only consults with an attorney because of a franchisee's non-compliance, the franchisee may be responsible for covering Augusta Lawn Care's legal expenses.
In practical terms, this clause means that a franchisee could face significant financial burdens beyond initial franchise fees and operating costs if they fail to adhere to the franchise agreement. It also incentivizes franchisees to maintain compliance to avoid triggering legal action that could result in them having to pay Augusta Lawn Care's legal fees and other associated costs. This provision is fairly standard in franchise agreements, as it aims to protect the franchisor's interests and ensure franchisees uphold their contractual obligations.