Under what circumstances does Body20 require a franchisee to reimburse Body20 for expenses, including attorney's fees?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
own of the facts giving rise to the claim, except for the following claims by us against you related to (i) any of your financial obligations (including the underpayment of any fees), (ii) the indemnity in Section 11 (Indemnification), (iii) your use of the Marks, (iv) your obligations under Section 10 (Proprietary Information) or Section 12 (Noncompete Covenants) of this Agreement, or (v) a Transfer. For the avoidance of doubt, the claims by us against you enumerated in (i) to (v) may be brought at any time.
- 16.9 Attorneys' Fees and Costs. You agree to reimburse us for all expenses we and our affiliates reasonably incur (including attorneys' fees): (i) to enforce the terms of this Agreement or any obligation owed to us by any of the Franchisee Parties (whether or not we initiate a legal proceeding, unless we initiate and fail to substantially prevail in such court or formal legal proceeding); and (ii) in the defense of any claim any of the Franchisee Parties assert against us on which we substantially prevail in court or other formal legal proceedings.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, a franchisee may be required to reimburse Body20 for expenses, including attorney's fees, under specific circumstances related to enforcement and defense of claims. Specifically, the franchisee agrees to reimburse Body20 for all expenses, including attorney's fees, that Body20 and its affiliates reasonably incur to enforce the terms of the Franchise Agreement or any obligation owed to Body20 by any of the Franchisee Parties. This applies whether or not Body20 initiates a legal proceeding, unless Body20 initiates and fails to substantially prevail in such court or formal legal proceeding.
Furthermore, the franchisee is obligated to cover Body20's expenses, including attorney's fees, in the defense of any claim any of the Franchisee Parties assert against Body20, provided that Body20 substantially prevails in court or other formal legal proceedings. This means that if a franchisee brings a claim against Body20 and Body20 wins, the franchisee will have to pay Body20's legal costs.
However, if the franchise agreement requires a franchisee to reimburse Body20 for court costs or expenses, including attorneys' fees, such provision applies only if Body20 is the prevailing party in any judicial or arbitration proceeding. This clarification ensures that the franchisee is only responsible for these costs if Body20 wins the legal dispute. This is a fairly standard clause in franchise agreements, intended to protect the franchisor from incurring legal costs when successfully defending against franchisee claims or enforcing the franchise agreement.