In the event of legal action regarding the Bft franchise agreement, who determines the reasonable compensation for preparation, investigation, and costs?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
K. Attorneys' Fees and Costs.
- (1) To the extent permitted by applicable law, if legal action or arbitration is necessary to enforce the terms and conditions of this Agreement, the prevailing Party shall be entitled to recover reasonable compensation for preparation, investigation, court costs, arbitration costs (if applicable) and reasonable attorneys' fees, from the non-prevailing Party as fixed by an arbitrator or court of competent jurisdiction.
- (2) Separate and distinct from the right of a prevailing Party to recover expenses, costs and fees in connection with any legal proceeding or arbitration, the prevailing Party shall also be entitled to receive all expenses, costs and reasonable attorneys' fees incurred in connection with the enforcement of any arbitration award or judgment entered, to the extent permitted by applicable law. Furthermore, the right to recover post-arbitration award and post judgment expenses, costs and attorneys' fees shall be severable and shall survive any award or judgment and shall not be deemed merged into such judgment.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, in the event of legal action or arbitration to enforce the terms of the Franchise Agreement, the arbitrator or a court of competent jurisdiction will determine the reasonable compensation. This compensation covers preparation, investigation, court costs, arbitration costs (if applicable), and reasonable attorneys' fees. The compensation will be paid by the non-prevailing party to the prevailing party.
This means that if a Bft franchisee wins a legal dispute against Bft, they may be able to recover costs associated with the legal proceedings. Conversely, if Bft wins against a franchisee, the franchisee may be responsible for covering Bft's legal costs. This allocation of fees can significantly impact the financial burden of a legal dispute.
It is also important to note that the prevailing party is entitled to receive all expenses, costs, and reasonable attorneys' fees incurred in connection with the enforcement of any arbitration award or judgment entered, to the extent permitted by applicable law. This right to recover post-arbitration award and post-judgment expenses, costs, and attorneys' fees is severable and survives any award or judgment and is not deemed merged into such judgment.