Who bears the individual costs of arbitration for a Dog Haus franchise dispute?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
19.2.4 Judgment upon any award rendered may be entered in any Court having jurisdiction thereof. The arbitrator will have the right to award or include in the award any relief which it deems proper in the circumstances, including money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief and attorneys' fees and costs, provided that the arbitrator will not have the authority to award exemplary or punitive damages. To the extent permitted by Applicable Law, no issue of fact or law shall be given preclusive or collateral estoppel effect in any arbitration under this Agreement, except to the extent such issue may be been determined in another proceeding between Franchisor and Franchisee. The award and decision of the arbitrator will be conclusive and binding upon all Parties and judgment upon the award may be entered in any court of competent jurisdiction. Each Party waives any right to contest the validity or enforceability of the award. The Parties shall be bound by the provisions of any limitation on the period of time by which claims must be brought. Each Party must submit or file any claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedure) within the same proceedings as the claim to which it relates. Any claim which is not submitted or filed in the proceeding will be barred.
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
Based on the 2025 Dog Haus Franchise Disclosure Document, the arbitrator in a dispute has the authority to award attorneys' fees and costs to the prevailing party. This means that the responsibility for covering individual costs, such as legal representation and other associated expenses, ultimately falls on the party that does not prevail in the legal action or proceeding. The arbitrator can order the losing party to pay the legal fees and costs of the winning party.
This arrangement can significantly impact a franchisee's decision to pursue legal action against Dog Haus, or vice versa. If a franchisee believes they have a strong case, they might be encouraged to proceed knowing that they could potentially have their legal costs covered if they win. Conversely, they would be responsible for the legal costs of Dog Haus if they lose.
This clause is relatively standard in franchise agreements, as it aims to discourage frivolous lawsuits and encourages parties to resolve disputes amicably. However, it also introduces a financial risk for franchisees, as they could be responsible for substantial legal fees if they do not prevail in their claim against Dog Haus. Franchisees should carefully consider the potential costs and benefits before initiating any legal action and should seek legal counsel to assess the strength of their case.