If a Casiola franchisee breaches the Franchise Agreement and loses a lawsuit, what is the franchisee obligated to pay?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
If we hire an attorney or file suit against you because you have breached this Agreement and if we prevail in such lawsuit, you agree to pay the reasonable attorney fees and costs that we incur.
Franchisee agrees that in the event that an arbitrator in any arbitration proceeding and/or, a court of competent jurisdiction shall issue an award, judgment, decision and/or order finding, holding and/or declaring Franchisee's breach of this Agreement than Franchisor shall also be entitled to the recovery of all reasonable attorney fees, costs and expenses associated with and/or related to such arbitration and/or litigation. Said fees, costs and expenses shall include, but not be limited to, attorney fees, arbitration fees, arbitrator fees, deposition expenses, expert witness fees and filing fees.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, if a franchisee breaches the Franchise Agreement and Casiola prevails in a lawsuit, the franchisee must cover Casiola's reasonable attorney fees and costs incurred during the lawsuit.
Additionally, if an arbitrator or a court determines that the franchisee has breached the agreement, Casiola is entitled to recover all reasonable attorney fees, costs, and expenses related to the arbitration or litigation. These expenses include attorney fees, arbitration fees, arbitrator fees, deposition expenses, expert witness fees, and filing fees.
This means that a Casiola franchisee could face significant financial burdens beyond the initial damages if they are found to be in breach of contract. It is important for prospective franchisees to fully understand their obligations under the Franchise Agreement and to seek legal counsel if they are unsure of their responsibilities. This clause is fairly standard in franchise agreements, as it protects the franchisor from incurring legal expenses due to a franchisee's non-compliance.