Under what circumstances must a Checkersrallys franchisee reimburse the franchisor for attorneys' fees?
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, a franchisee may be required to reimburse Checkersrallys for legal costs under specific circumstances. If Checkersrallys files a claim against a franchisee or their owners in a judicial or arbitration proceeding for amounts owed to Checkersrallys or its affiliates, and Checkersrallys prevails, the franchisee must reimburse Checkersrallys for all costs and expenses. These costs include reasonable accounting, paralegal, expert witness, and attorneys' fees.
Additionally, if Checkersrallys is required to engage legal counsel because a franchisee fails to comply with the Franchise Agreement, the franchisee must reimburse Checkersrallys for any attorneys' fees, costs, and expenses incurred. This means that franchisees need to be diligent in adhering to the terms of the agreement to avoid potential legal action that could result in them having to cover Checkersrallys's legal expenses.
This provision highlights the importance of understanding and complying with the Franchise Agreement. Failure to do so can lead to not only potential legal action but also the added financial burden of covering Checkersrallys's legal costs. Prospective franchisees should carefully review the Franchise Agreement and seek legal counsel to fully understand their obligations and the potential financial implications of non-compliance.