For a Belocal franchise in California, what does the arbitrator have to award to the prevailing party?

According to Belocal's 2025 Franchise Disclosure Document, in the event of arbitration, the arbitrator is required to award the prevailing party the reasonable costs and fees, including attorneys' fees, that they incurred during the arbitration process. This applies to Belocal franchisees in California.

This means that if a Belocal franchisee in California wins an arbitration case against the franchisor, Belocal must cover the franchisee's reasonable costs and attorney fees. Conversely, if Belocal wins, the franchisee would be responsible for Belocal's costs and fees. This provision aims to ensure that the prevailing party is not unduly burdened by the financial costs of resolving the dispute through arbitration.

It is important for prospective Belocal franchisees to understand this clause, as arbitration can be a costly process. Knowing that the prevailing party can recover their costs and fees may influence a franchisee's decision to pursue arbitration and can also impact settlement negotiations. Franchisees should consult with legal counsel to fully understand the implications of this arbitration clause and how it applies to their specific circumstances in California.