Must the relief obtained by the prevailing party in a Bombs Away legal proceeding be substantial to be considered the prevailing party?

According to Bombs Away's 2024 Franchise Disclosure Document, in any legal proceeding related to the franchise agreement, the 'prevailing party' is defined as the party that prevailed on the central litigated issues and obtained substantial relief. This definition is important because the non-prevailing party is responsible for paying the prevailing party's attorney fees, costs, and other expenses.

This means that for a Bombs Away franchisee to recover legal costs from Bombs Away in a dispute, the franchisee must not only win the case but also achieve a significant outcome on the main points of contention. If the franchisee wins on a minor or technical point, they may not be deemed the prevailing party and thus would not be entitled to reimbursement of their legal expenses. This could discourage franchisees from pursuing legal action unless they are confident of a substantial victory.

The requirement of 'substantial relief' adds a layer of risk for franchisees considering legal action against Bombs Away. Even if a franchisee believes they have a strong case, they must also assess the likelihood of achieving a significant outcome to justify the potential expense of litigation. This clause could be seen as favoring Bombs Away, as it may deter franchisees from bringing claims that, while valid, might not result in 'substantial relief'.

Many franchise agreements include clauses about legal costs, but the specific definition of 'prevailing party' can vary. Some agreements might simply define it as the party that wins the case, without requiring 'substantial relief.' Prospective Bombs Away franchisees should carefully consider this provision and understand the potential financial implications before signing the franchise agreement.