Does the Chatime definition of 'Legal Costs' for Chatime include expenses incurred in connection with mediation?

According to Chatime's 2025 Franchise Disclosure Document, the definition of 'Legal Costs' does include expenses for mediation. Specifically, 'Legal Costs' are defined as all fees, costs, and disbursements paid or payable by Chatime or its affiliates to their legal representatives. These costs also include other expenses incurred by Chatime or its affiliates related to a demand, action, arbitration, or other proceeding, explicitly mentioning mediation, compromise, out-of-court settlement, or appeal.

This means that if a franchisee is involved in a dispute with Chatime that proceeds to mediation, the franchisee could be responsible for Chatime's legal costs if the franchisee is found to be in breach of the franchise agreement. This could include not only the fees for Chatime's attorneys but also other expenses Chatime incurs during the mediation process.

This broad definition of 'Legal Costs' and the franchisee's potential responsibility for them highlights the importance of understanding the franchise agreement and seeking legal counsel before signing. Franchisees should be aware of the potential financial burden they could face if a dispute arises and escalates to mediation or other legal proceedings.