What is the arbitrator required to render in a Beard Papas arbitration?

According to the 2025 Beard Papas FDD, if an arbitrator in any arbitration proceeding finds that the franchisee has breached the Franchise Agreement, Beard Papas is entitled to recover all reasonable attorney fees, costs, and expenses related to the arbitration or litigation. These expenses include attorney fees, arbitration fees, arbitrator fees, deposition expenses, expert witness fees, and filing fees. This means that if a Beard Papas franchisee is found to be in breach of contract through arbitration, they may be responsible for covering Beard Papas's legal costs in addition to their own.

This provision is significant for prospective franchisees as it highlights the potential financial risks associated with disputes. Should a disagreement arise and proceed to arbitration, a franchisee found in breach could face substantial financial burdens beyond the immediate damages or penalties. This could include covering not only their own legal representation but also Beard Papas's expenses, potentially escalating the overall cost of the dispute.

Many franchise agreements include clauses about dispute resolution and attorney fees, but the specifics can vary. Some agreements may require both parties to cover their own costs regardless of the outcome, while others might have a more balanced approach to cost allocation. The Beard Papas agreement places a heavier financial burden on the franchisee in the event of a breach, which is a point to consider carefully.

Therefore, prospective Beard Papas franchisees should carefully evaluate the terms of the franchise agreement regarding dispute resolution and attorney fees. Understanding the potential financial implications of a breach and the associated arbitration process is crucial for making an informed decision about investing in a Beard Papas franchise.