Who is responsible for reimbursing Jeni's Splendid Ice Creams Franchise, LLC for costs incurred in enforcing the Guaranty for a Cream franchise?

According to Cream's 2025 Franchise Disclosure Document, the prevailing party in a judicial or arbitration proceeding is entitled to recover costs and expenses from the other party. This includes damages, arbitration and court costs, and reasonable attorneys' fees. This cost recovery applies to any proceeding, meaning that if Jeni's Splendid Ice Creams Franchise, LLC (the franchisor) prevails in enforcing a Guaranty, the guarantor would be responsible for reimbursing Cream for the costs incurred.

In the context of a Cream franchise, a Guaranty is a legal agreement where an individual (the Guarantor) assures the franchisor that the franchisee will fulfill their obligations under the Franchise Agreement. If the franchisee fails to meet these obligations, the Guarantor steps in to ensure performance. If Cream has to take legal action to enforce this Guaranty, the guarantor may have to cover Cream's legal expenses if Cream wins the case.

This arrangement is fairly standard in franchising, as it ensures that the prevailing party in a dispute is not unduly burdened by legal costs. It also incentivizes both parties to act reasonably and avoid unnecessary litigation. For a prospective Cream franchisee, this means understanding the potential financial exposure if a Guaranty is required and legal disputes arise.