Does the definition of 'Legal Costs' for Chatime include costs paid to legal representatives?

According to Chatime's 2025 Franchise Disclosure Document, the definition of 'Legal Costs' does include fees, costs, and disbursements paid to legal representatives. Specifically, it refers to fees, costs, and disbursements actually paid or payable by Chatime or its affiliates to their own legal representatives. This applies whether or not there's a formal retainer or costs agreement in place between Chatime and its legal representatives.

This definition extends to other expenses incurred by Chatime or its affiliates related to demands, actions, arbitrations, or other proceedings. These proceedings can include mediation, compromise, out-of-court settlements, or appeals. The key point is that these costs must be associated with legal actions or proceedings involving Chatime.

For a prospective Chatime franchisee, this means that if a legal dispute arises involving Chatime, the definition of 'Legal Costs' is broad and includes various expenses. It is important to understand this definition because, as outlined in section 10.1, the franchisee may be responsible for indemnifying Chatime against legal costs arising from certain situations, such as a breach of the franchise agreement or negligence on the part of the franchisee.