Who bears the costs related to the reference to the Expert in a Bevaris Alliance dispute?

According to the 2024 Bevaris Alliance Franchise Disclosure Document, in the event of a dispute requiring an expert, each party involved will bear their own costs related to the reference to the expert. However, the fees charged by the expert, along with any costs the expert incurs to reach a determination, including fees for advisors they appoint, will be divided between the parties as directed by the expert. This means that while franchisees are responsible for their own legal and consulting fees, they may also be responsible for a portion of the expert's fees and related expenses.

This arrangement is fairly standard in franchising, where both the franchisor and franchisee typically cover their own legal expenses during disputes. The added provision that the expert determines how their fees are split introduces an element of uncertainty. Depending on the nature of the dispute and the expert's assessment, a franchisee could end up paying a significant portion of these expert costs.

Prospective Bevaris Alliance franchisees should consider this potential expense when evaluating the franchise opportunity. It would be prudent to inquire about the types of disputes that have historically arisen within the Bevaris Alliance system and the typical costs associated with expert determinations. Understanding these potential costs can help a franchisee better prepare for and manage potential financial risks associated with conflict resolution.

It is also important to note that all matters concerning the expert's determination process and outcome are to be kept confidential among the parties and the expert. This confidentiality clause could limit a franchisee's ability to discuss the details of the dispute and its resolution with others, including other franchisees, which could impact their ability to gather support or share information.