How is the 'prevailing party' defined in the Bombs Away franchise agreement regarding legal costs?

According to the 2024 Bombs Away Franchise Disclosure Document, in any legal proceeding, including arbitration, related to the Franchise Agreement or any guaranty, the non-prevailing party is responsible for covering the prevailing party's attorney fees, costs, and other legal expenses. The "prevailing party" is defined as the party that prevails on the central litigated issues and obtains substantial relief. This definition applies to legal proceedings and arbitrations related to the franchise agreement.

This means that if a Bombs Away franchisee is involved in a legal dispute with Bombs Away and does not win on the primary issues in the case, they will be responsible for Bombs Away's legal costs, including attorney fees. Conversely, if the franchisee wins substantially on the main points of contention, Bombs Away would be responsible for the franchisee's legal costs. This allocation of legal costs can significantly impact the financial burden of litigation.

It is important for a prospective Bombs Away franchisee to understand this clause, as legal disputes can be costly. The franchisee should carefully consider the potential financial risk associated with legal challenges and the importance of prevailing in any such dispute to avoid incurring substantial legal expenses. 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 costs.