What is the limit to how much a party is obligated to pay for arbitration costs in a City Publications dispute?

According to the 2025 City Publications FDD, Section 24G of the Franchise Agreement stipulates that in California, arbitration will occur at the forum indicated in Section 24B, with the costs being borne by the prevailing party. This means that the party who wins the arbitration case will have their costs covered by the losing party. However, the FDD does not specify a monetary limit on these costs.

In general, the costs associated with arbitration can include filing fees, arbitrator fees, administrative fees, and attorney's fees. The absence of a specific limit in the City Publications FDD means that the potential financial exposure for a franchisee could be significant, depending on the complexity and duration of the arbitration proceedings.

Prospective franchisees should be aware of this open-ended liability and consider it carefully. It is advisable to consult with legal counsel to fully understand the potential financial risks associated with arbitration under the City Publications franchise agreement, particularly in relation to California law. Franchisees should also inquire with City Publications about typical arbitration costs and whether there have been any unusually expensive cases in the past.