Who chooses the legal counsel if I must defend Chocolate Fish Coffee in a legal action?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Our actual cost | On demand | Payable only if (1) we audit you because | |
| you have failed to submit required reports | |||
| or other non-compliance, or (2) the audit | |||
| concludes that you under-reported gross | |||
| sales b | |||
| period | |||
| Payable only if we conduct an inspection | |||
| of your business because of a | |||
| governmental report, customer complaint | |||
| or other customer feedback, or your | |||
| default or non-compliance with any | |||
| system specification. | |||
| We may cure your non-compliance on | |||
| your behalf (for example, if you do not | |||
| have required insurance, we may purchase | |||
| insurance for you), and you will owe our | |||
| costs plus a 10% administrative fee. | |||
| $10,000 plus any | Payable if you sell your business. | ||
| broker fees and other | |||
| out-of-pocket costs | |||
| we incur | |||
| An amount equal to | |||
| royalty fees and | |||
| Brand Fund | |||
| contributions for the | |||
| lesser of (i) 2 years | |||
| or (ii) the remaining | |||
| weeks of the | |||
| franchise term. | |||
| Our costs and losses | You must indemnify and defend (with | ||
| from any legal | counsel reasonably acceptable to us) us | ||
| action related to the | and our affiliates against all losses in any | ||
| operation of your | action by or against us related to, or | ||
| franchise | alleged to arise out of, the operation of | ||
| your franchise (unless caused by our | |||
| misconduct or negligence). |
Source: Item 6 — OTHER FEES (FDD pages 10–13)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, if a legal action arises related to the operation of your franchise, you are required to indemnify and defend Chocolate Fish Coffee and its affiliates. However, the legal counsel you choose to defend the company must be reasonably acceptable to Chocolate Fish Coffee.
This means that while you are responsible for the costs and defense of any legal actions stemming from your franchise's operations, Chocolate Fish Coffee retains the right to approve your choice of legal representation. This provision ensures that the chosen counsel meets Chocolate Fish Coffee's standards and is competent to handle the legal matter effectively.
It is important to note that this obligation to indemnify and defend Chocolate Fish Coffee does not apply if the legal action is caused by Chocolate Fish Coffee's own misconduct or negligence. In such cases, you would not be responsible for their legal defense.