What standard must the counsel meet to be acceptable to Chocolate Fish Coffee?
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 must indemnify and defend Chocolate Fish Coffee and its affiliates against all losses. This defense must be conducted with counsel that is reasonably acceptable to Chocolate Fish Coffee.
This means that if Chocolate Fish Coffee faces a lawsuit or legal claim stemming from your franchise's operations (unless caused by Chocolate Fish Coffee's own misconduct or negligence), you are responsible for covering their losses. This includes hiring a lawyer to defend them.
The requirement that the counsel be "reasonably acceptable" to Chocolate Fish Coffee gives them some say in who represents them in such a situation. While you are responsible for paying for the legal defense, Chocolate Fish Coffee has the right to ensure the counsel meets their standards. It is important to clarify with Chocolate Fish Coffee what criteria they use to determine if counsel is "reasonably acceptable" to avoid potential conflicts or delays in the event this situation arises.