What costs and expenses are included in the reimbursement if Checkersrallys prevails in a legal proceeding against a Checkersrallys franchisee?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Checkersrallys's 2025 Franchise Disclosure Document, if Checkersrallys prevails in a legal claim against a franchisee, the franchisee must reimburse Checkersrallys for all costs and expenses. These expenses include reasonable accounting fees, paralegal fees, expert witness fees, and attorney's fees.
This means that a Checkersrallys franchisee could face significant financial burden beyond the initial damages or judgment if Checkersrallys wins the legal proceeding. The franchisee is responsible for covering not only their own legal costs but also Checkersrallys's expenses for accounting, paralegal support, expert witnesses, and attorneys.
It is important for prospective Checkersrallys franchisees to understand this potential financial obligation and factor it into their risk assessment. Franchisees should seek legal counsel to fully understand the implications of this clause and consider negotiating terms or securing adequate insurance coverage to mitigate potential losses.