If Checkersrallys prevails in a judicial or arbitration proceeding against a franchisee, is the franchisee obligated to reimburse Checkersrallys for accounting fees?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
18.06 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 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if Checkersrallys files a claim against a franchisee or their owners in a judicial or arbitration proceeding to enforce the franchise agreement, and Checkersrallys prevails, the franchisee must reimburse Checkersrallys for all costs and expenses. These costs and expenses include reasonable accounting, paralegal, expert witness, and attorneys' fees.
This means that if a Checkersrallys franchisee breaches the franchise agreement and Checkersrallys takes legal action to enforce the agreement, the franchisee could be responsible for covering Checkersrallys's legal and related costs if Checkersrallys wins the case. This could include not only attorney fees, but also fees for accountants, paralegals, and expert witnesses that Checkersrallys uses to support their case.
This provision is fairly standard in franchise agreements. It is designed to protect Checkersrallys from incurring expenses when franchisees fail to meet their contractual obligations. Prospective franchisees should be aware of this clause and understand that breaching the agreement could lead to significant financial liabilities beyond just the initial damages or unpaid fees.