Under what circumstances is a Crave franchisee required to reimburse Crave for legal costs and expenses related to enforcing the Franchise Agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- 19.8 If we are required to enforce this Agreement in a judicial or arbitration proceeding, you shall reimburse us for our costs and expenses, including, without limitation, reasonable accountants', attorneys', attorney assistants', and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses, whether incurred prior to, in preparation for or in contemplation of the filing of any such proceeding.
If we are required to engage legal counsel in connection with any failure by you to comply with this Agreement, you shall reimburse us for any of the above-listed costs and expenses incurred by us.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, a franchisee may be required to reimburse Crave for legal costs and expenses in certain situations. Specifically, if Crave has to initiate a judicial or arbitration proceeding to enforce the Franchise Agreement, the franchisee will have to cover Crave's costs. These costs include reasonable fees for accountants, attorneys, attorney assistants, and expert witnesses. They also include costs related to investigating and proving facts, court costs, other litigation expenses, and travel and living expenses. These expenses can be incurred before, during, or in anticipation of filing any legal proceeding.
Additionally, if Crave needs to hire legal counsel because the franchisee fails to comply with the Franchise Agreement, the franchisee must reimburse Crave for all the costs and expenses incurred. This provision ensures that Crave can recover expenses associated with enforcing the agreement and addressing franchisee non-compliance.
This is a fairly standard clause in franchise agreements. It is designed to protect the franchisor from bearing the full financial burden of legal action when a franchisee breaches the agreement. Prospective franchisees should understand that non-compliance can lead to significant financial liabilities beyond potential damages or penalties.