Who pays the legal costs in a legal proceeding related to the Bombs Away franchise agreement?

According to Bombs Away's 2024 Franchise Disclosure Document, the non-prevailing party in any legal proceeding, including arbitration, related to the Franchise Agreement or any guaranty, is responsible for paying the prevailing party's attorney fees, costs, and other expenses. The prevailing party is defined as the party that obtained substantial relief on the central litigated issues.

This means that if a Bombs Away franchisee is involved in a legal dispute with Bombs Away and loses, the franchisee will be responsible for covering Bombs Away's legal costs, in addition to their own. Conversely, if the franchisee wins the dispute and obtains substantial relief, Bombs Away would be responsible for covering the franchisee's legal costs. This allocation of legal costs can significantly impact the financial burden of litigation.

This type of clause is fairly common in franchise agreements. It is important for a prospective Bombs Away franchisee to carefully consider this provision, as it could create a significant financial risk if a dispute arises. Franchisees should factor in potential legal costs when assessing the overall financial viability of the franchise and consider consulting with an attorney to fully understand the implications of this clause.