Under the Cicis Franchise Agreement, what costs can the prevailing party recover in a judicial or arbitration proceeding?

According to Cicis's 2025 Franchise Disclosure Document, the prevailing party in any judicial or arbitration proceeding is entitled to recover specific costs from the other party. This includes all damages, costs, and expenses incurred during the proceeding. These recoverable expenses specifically include arbitration costs, court costs, and reasonable attorneys' fees. This clause aims to ensure that the party who wins a legal dispute is not unduly burdened by the financial costs of pursuing or defending their rights.

For a prospective Cicis franchisee, this "prevailing party" clause has significant implications. If a franchisee is involved in a dispute with Cicis that goes to court or arbitration, the franchisee could be responsible for covering Cicis's legal costs if Cicis prevails. Conversely, if the franchisee wins, Cicis would be responsible for the franchisee's legal costs. This creates a financial risk for franchisees, as legal battles can be expensive, and losing could mean covering not only their own costs but also those of Cicis.

It is important to note that the determination of who is the "prevailing party" is made by the court or arbitrator. Franchisees should carefully consider this clause and understand the potential financial exposure before entering into a franchise agreement with Cicis. They may want to consult with an attorney to fully understand the implications of this clause and to assess their risk tolerance.