In a judicial or arbitration proceeding, is the prevailing party entitled to recover damages, costs, and expenses from the other party according to the Cream franchise agreement?

According to Cream's 2025 Franchise Disclosure Document, the prevailing party in a judicial or arbitration proceeding is entitled to recover damages, costs, and expenses from the other party. This includes arbitration and court costs, as well as reasonable attorneys' fees, incurred during the proceeding. This clause applies to any judicial or arbitration proceeding related to the franchise agreement.

This provision means that if a Cream franchisee or Cream itself wins a legal dispute, the losing party will be responsible for covering the winner's financial losses, legal fees, and other associated costs. This can significantly reduce the financial burden on the prevailing party, as legal battles can be expensive. It also incentivizes both parties to act reasonably and avoid frivolous lawsuits, as the risk of having to pay the other party's expenses can be a deterrent.

However, it's important to note that this entitlement to recover costs is limited to the prevailing party. If the outcome is mixed or unclear, determining the prevailing party may become a point of contention. Additionally, the reasonableness of attorneys' fees can be challenged, potentially leading to further disputes. Franchisees should consult with a legal professional to fully understand the implications of this clause and how it might affect them in potential legal situations with Cream.