In a legal proceeding regarding a Crave Cookies dispute, what is the non-prevailing party obligated to pay?

According to Crave Cookies' 2025 Franchise Disclosure Document, in any legal proceeding related to the franchise agreement or any guaranty, the non-prevailing party is responsible for covering the prevailing party's attorney fees, costs, and other expenses associated with the legal proceeding. The prevailing party is defined as the party that prevailed on the central litigated issues and obtained substantial relief. This obligation does not extend to mediation proceedings. Franchisee and Crave Cookies will split the costs, and each will bear their own expenses of any mediation.

This means that if a Crave Cookies franchisee or Crave Cookies itself initiates a lawsuit and loses, they will be required to pay the legal costs of the winning party. These costs can include attorney fees, court fees, and other related expenses. This provision encourages both parties to carefully consider the merits of their case before initiating legal action, as the financial consequences of losing could be significant.

It is important to note that this clause applies to legal proceedings, excluding mediation. In mediation, the costs are split between the franchisee and Crave Cookies, regardless of the outcome. This encourages the use of mediation as a cost-effective way to resolve disputes before resorting to more expensive litigation. Additionally, any legal action must be instituted within two years from the date the conduct or event that forms the basis of the legal action is discovered. This time limitation does not apply to claims related to non-payment, indemnity, or unauthorized use of confidential information or the marks.