What expenses can the prevailing party recover in an arbitration involving an Extreme Art Studio franchise?

According to the 2024 Extreme Art Studio Franchise Disclosure Document, the prevailing party in an arbitration is entitled to recover specific expenses. The prevailing party can recover its expenses, including reasonable attorney fees and accounting fees. This is in addition to any other relief to which the prevailing party is found entitled. Such relief may include specific performance, injunctive, or declaratory relief under the Franchise Agreement.

This means that if an Extreme Art Studio franchisee or franchisor wins an arbitration case, they can recoup costs associated with the legal proceedings. These recoverable costs extend beyond just direct damages and can include the expenses of hiring attorneys and accountants to build their case. This provision aims to make the injured party whole, covering not only the immediate financial harm but also the costs of seeking legal recourse.

However, it's important to note that Extreme Art Studio and its franchisees waive, to the fullest extent permitted by law, any right or claim to any punitive, treble, or multiple damages against the other. The arbitration award is limited to the recovery of any actual damages sustained. This waiver of punitive damages is a common practice in franchise agreements, directing the focus of arbitration towards compensating actual losses rather than punishing the losing party.