What specific costs and expenses are included in the reimbursement to Checkers if they prevail in a legal proceeding?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
10.04 Costs of Enforcement. If we file a claim in a judicial or arbitration proceeding for amounts you or any of your Owners owe us or any of our Affiliates, or if we enforce this Agreement in a judicial or arbitration proceeding, and we prevail in any such proceeding, you agree to reimburse us for all of our costs and expenses, including reasonable accounting, paralegal, expert witness and attorneys' fees. If we are required to engage legal counsel in connection with your failure to comply with this Agreement, you must reimburse us for any attorneys' fees, costs and expenses we incur.
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, if Checkers prevails in a legal proceeding against a franchisee, the franchisee must reimburse Checkers for specific costs and expenses. These include reasonable accounting fees, paralegal fees, expert witness fees, and attorneys' fees.
This means that if a Checkers franchisee is taken to court or arbitration by Checkers and Checkers wins the case, the franchisee will be responsible for covering Checkers' legal and related costs. This could potentially amount to a significant financial burden for the franchisee, depending on the complexity and length of the legal proceedings.
It is common in franchise agreements for the franchisee to bear the franchisor's legal costs if the franchisor prevails in a dispute. This clause incentivizes franchisees to comply with the franchise agreement and avoid actions that could lead to legal action. Prospective franchisees should carefully consider this financial responsibility and factor it into their risk assessment before investing in a Checkers franchise.