What is the effect of Checkersrallys prevailing in any such proceeding?
Checkersrallys 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 Checkersrallys's 2025 Franchise Disclosure Document, if Checkersrallys files a claim against a franchisee in a judicial or arbitration proceeding for amounts owed or to enforce the Franchise Agreement, and Checkersrallys prevails, the franchisee must reimburse Checkersrallys for all costs and expenses. These costs include reasonable accounting, paralegal, expert witness, and attorneys' fees.
This means that a franchisee could be responsible for significant legal and related costs if Checkersrallys wins a legal dispute. This could create a substantial financial burden for the franchisee, especially if the case is complex or involves a lengthy legal battle.
This provision is fairly standard in franchise agreements. It is designed to protect the franchisor's financial interests and ensure that they are not penalized for pursuing legitimate claims against franchisees who are in breach of their agreements. Franchisees should be aware of this potential liability and factor it into their risk assessment when considering investing in a Checkersrallys franchise.