Does Checkersrallys have an obligation to advance a franchisee's share of the costs, fees, and expenses of an arbitration proceeding?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
We reserve the right, but have no obligation, to advance your share of the costs, fees and expenses of any arbitration proceeding, including any arbitrator fees, in order for such arbitration proceeding to take place, and by doing so will not be deemed to have waived or relinquished our right to seek the recovery of those amounts from the arbitrators, who shall provide for such relief in the final award, in addition to the costs, fees, and expenses that are recoverable under Section 18.06 below.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys does not have an obligation to advance a franchisee's share of the costs, fees, and expenses of any arbitration proceeding. However, Checkersrallys reserves the right to advance the franchisee's share of these costs, fees, and expenses, including arbitrator fees, to allow the arbitration to proceed.
If Checkersrallys chooses to advance these costs, it does not waive its right to seek recovery of these amounts from the arbitrators. The arbitrators are expected to provide for such relief in the final award, in addition to any other recoverable costs, fees, and expenses as outlined in Section 18.06 of the Franchise Agreement.
This means that while Checkersrallys is not required to cover a franchisee's arbitration costs upfront, it has the option to do so. If Checkersrallys exercises this option, the franchisee may ultimately be responsible for reimbursing Checkersrallys for these advanced costs if the arbitrator's award stipulates it. Franchisees should be aware of this potential financial responsibility when considering arbitration.