What standard must the counsel meet to be acceptable to Better Blend in legal defense?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| An amount equal to | On demand | Payable if we terminate your franchise | |
| royalty fees and | agreement because of your default, or if | ||
| marketing fund | you terminate the franchise agreement | ||
| contributions for the | without the right to do so. | ||
| lesser of (i) 2 years | |||
| or (ii) the remaining | |||
| weeks of the | |||
| franchise term. | |||
| All of our costs and | You must indemnify and defend (with | ||
| losses from any legal | counsel reasonably acceptable to us) us | ||
| action related to the | and our affiliates against all losses in any | ||
| operation of your | action by or against us related to, or | ||
| franchise, or any act | alleged to arise out of, the development or | ||
| by you or your | operation of your franchise, or any act or | ||
| employees | omission by you or any employee of your | ||
| business (unless caused by our intentional | |||
| misconduct or gross negligence |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, if a legal action arises related to the operation of your franchise, or any act by you or your employees, you are required to indemnify and defend Better Blend and its affiliates. This defense must be conducted with counsel that is reasonably acceptable to Better Blend.
This means that if you are involved in a legal dispute connected to your Better Blend franchise, you are responsible for covering Better Blend's losses. You must hire an attorney to defend Better Blend, but Better Blend has the right to approve or reject your choice of attorney.
The FDD does not specify the exact criteria Better Blend will use to determine whether counsel is "reasonably acceptable." It is common practice in franchising for franchisors to reserve the right to approve franchisee's counsel to ensure competence and alignment of interests in legal matters that could affect the entire brand. A prospective franchisee should clarify with Better Blend what qualifications or criteria they use to assess the acceptability of legal counsel.