In a Counselor Realty arbitration, who pays the legal fees of the prevailing party?

According to Counselor Realty's 2025 Franchise Disclosure Document, in the event of arbitration, the prevailing party is entitled to recover its costs, including reasonable attorneys' fees. This means that if a Counselor Realty franchisee wins an arbitration case against the franchisor, Counselor Realty, they can recover the legal fees they paid to their attorney. Conversely, if Counselor Realty prevails, the franchisee would be responsible for Counselor Realty's legal fees.

This arrangement can significantly impact a franchisee's decision to pursue arbitration. Knowing that they can recover legal fees if they win can make arbitration a more attractive option. However, it also means that a franchisee risks paying Counselor Realty's legal fees if they lose, which could be a substantial financial burden.

It is important to note that this fee recovery applies specifically to arbitration. Counselor Realty retains the right to sue to collect money owed, protect their trademarks, or compel inspections or audits. The FDD does not specify whether the prevailing party can recover legal fees in these types of lawsuits, so prospective franchisees should seek clarification on this point.