In a Bombs Away legal proceeding (including arbitration), which party is responsible for paying the prevailing party's attorney fees?

According to Bombs Away's 2024 Franchise Disclosure Document, in any legal proceeding, including arbitration, related to the Franchise Agreement or any guaranty, the non-prevailing party is responsible for paying the prevailing party's attorney fees, costs, and other expenses. The prevailing party is defined as the party that prevailed on the central litigated issues and obtained substantial relief. This means that if a Bombs Away franchisee sues Bombs Away (or vice versa) and loses, they will be responsible for covering Bombs Away's legal costs. Conversely, if the franchisee wins, Bombs Away will be responsible for the franchisee's legal costs.

This arrangement can significantly impact a franchisee's decision to pursue legal action. A franchisee should carefully consider the strength of their case and the potential costs involved, as losing could mean a substantial financial burden. This is a fairly standard clause in franchise agreements, intended to discourage frivolous lawsuits and ensure that the party in the right is not penalized by legal expenses.

It is important for a prospective Bombs Away franchisee to understand this clause and its implications fully. They should consult with an attorney to assess their rights and obligations under the Franchise Agreement and to evaluate the potential risks and benefits of pursuing legal action against Bombs Away.