What specific costs can the prevailing party recover from the non-prevailing party in a Bft legal action or arbitration?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
(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, if legal action or arbitration is necessary to enforce the terms of the franchise agreement, the prevailing party can recover specific costs from the non-prevailing party. This includes reasonable compensation for preparation, investigation, court costs, and arbitration costs, if applicable. The prevailing party is also entitled to reasonable attorneys' fees, as determined by an arbitrator or a court with jurisdiction.
Importantly, the right to recover these expenses extends beyond the initial legal proceeding. The prevailing party is also entitled to all expenses, costs, and reasonable attorneys' fees incurred while enforcing any arbitration award or judgment obtained. This right to recover post-arbitration award and post-judgment expenses is separate and survives any award or judgment, meaning it doesn't merge into the judgment itself.
This provision ensures that the prevailing party in a dispute with Bft can be made whole by recovering the costs associated with enforcing their rights under the franchise agreement. It also likely incentivizes both parties to adhere to the agreement and resolve disputes amicably, as the risk of incurring the other party's legal costs can be significant. However, the FDD states that all of these recoveries are "to the extent permitted by applicable law", so there may be legal limits on the amounts or types of costs that can be recovered in certain jurisdictions.