How is the 'prevailing party' defined in the Desi District Franchise Agreement regarding legal costs?

According to the 2024 Desi District Franchise Disclosure Document, the franchise agreement outlines that in any legal proceeding, including arbitration, related to the agreement or any guaranty, the non-prevailing party is responsible for covering the prevailing party's attorney fees, costs, and other expenses incurred during the legal process.

The Desi District Franchise Agreement defines the "prevailing party" as the party that prevails on the central litigated issues and obtains substantial relief. This means that for a franchisee to be considered the prevailing party and thus be entitled to have their legal costs covered, they must win on the most important aspects of the case and receive significant compensation or other favorable outcomes.

This definition has important implications for prospective Desi District franchisees. It clarifies that simply winning a minor point in a legal dispute may not be enough to be considered the prevailing party. The franchisee must achieve a significant victory on the core issues of the case to recover their legal costs. This encourages franchisees to carefully assess the merits of their claims before initiating legal action, as they risk having to pay Desi District's legal fees if they do not achieve a substantial win. Franchisees should seek legal counsel to understand the potential costs and benefits before pursuing any legal action against Desi District.