Who is responsible for the costs and expenses incurred by Dog Haus in enforcing the non-compete agreement?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor becomes a party to any legal proceedings concerning this Agreement by reason of any act or omission of Candidate or its authorized representatives, Candidate shall be liable to Franchisor for the reasonable attorneys' fees and court costs incurred by Franchisor in the legal proceedings.
If either party commences a legal proceeding against the other party arising out of or in connection with this Agreement, the prevailing party shall be entitled to have and recover from the other party its reasonable attorneys' fees and costs of suit.
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, the Area Developer may be responsible for Dog Haus's legal costs in certain situations. Specifically, if Dog Haus becomes involved in legal proceedings due to any action or omission by the Area Developer or their representatives, the Area Developer may be liable for Dog Haus's reasonable attorney's fees and court costs. This includes legal proceedings related to the non-compete agreement.
This means that if an Area Developer violates the non-compete agreement, and Dog Haus has to take legal action to enforce it, the Area Developer could be required to cover Dog Haus's legal expenses. This could include attorney fees, court costs, and other related expenses. The Area Developer is responsible for these costs if Dog Haus prevails in the legal proceeding.
This provision serves as a deterrent against violating the non-compete agreement, as the potential financial burden of covering Dog Haus's legal costs could be significant. It also protects Dog Haus by ensuring they can recover expenses incurred while enforcing the agreement and safeguarding their business interests. This is a fairly standard clause in franchise agreements, intended to protect the franchisor's investment in its brand and system.