What do 'Legal Costs' include for Chatime?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (39) Legal Costs means all fees, costs and disbursements actually paid or payable by Franchisor or its Affiliates to its own legal representatives (whether or not assessed under a retainer or costs agreement in place between Franchisor and its legal representatives) and other expenses incurred by Franchisor or its Affiliates in connection with a demand, action, arbitration, or other proceeding (including mediation, compromise, out of court settlement, or appeal).
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, 'Legal Costs' encompass all fees, costs, and disbursements that Chatime or its affiliates actually pay or owe to their legal representatives. This includes fees regardless of whether they are assessed under a retainer or costs agreement between Chatime and its lawyers.
Furthermore, 'Legal Costs' also cover other expenses incurred by Chatime or its affiliates related to any demand, action, arbitration, or other proceeding. This broad definition extends to proceedings such as mediation, compromise, out-of-court settlements, or appeals.
For a prospective Chatime franchisee, this definition is important because it clarifies the scope of legal expenses for which they may be responsible under various circumstances outlined in the franchise agreement, such as indemnity clauses or enforcement actions. Understanding this definition can help franchisees anticipate potential legal liabilities and budget accordingly.