Who pays the legal fees if Bombs Away and I are in a legal proceeding?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Our costs and losses | You must indemnify and defend (with | ||
| from any legal | counsel reasonably acceptable to us) us | ||
| action related to the | and our affiliates against all losses in any | ||
| operation of your | action by or against us related to, or | ||
| franchise | alleged to arise out of, the operation of | ||
| your franchise (unless caused by our | |||
| misconduct or negligence). | |||
| Our attorney fees, | In any legal proceeding (including | ||
| court costs, and | arbitration), the losing party must pay the | ||
| other expenses of a | prevailing party’s attorney fees, court | ||
| legal proceeding, if | costs and other expenses. | ||
| we are the prevailing | |||
| party |
Source: Item 6 — OTHER FEES (FDD pages 9–13)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the responsibility for legal fees in a legal proceeding depends on who prevails in the action. The FDD states that in any legal proceeding, including arbitration, the losing party is responsible for covering the prevailing party's attorney fees, court costs, and other related expenses. This means that if Bombs Away wins a legal proceeding against you, you would be responsible for their legal costs. Conversely, if you win, Bombs Away would have to pay your legal fees and costs.
Additionally, the franchisee is required to indemnify and defend Bombs Away and its affiliates against losses from any legal action related to the operation of the franchise. This includes covering legal costs and using counsel reasonably acceptable to Bombs Away. However, this obligation does not apply if the legal action is caused by Bombs Away's misconduct or negligence.
This fee structure is fairly standard in franchising. It is important to note that this fee applies to any legal proceeding, including arbitration, so it is not limited to lawsuits filed in court. As a prospective franchisee, it is crucial to understand these financial responsibilities and potential liabilities associated with legal actions involving Bombs Away.