Can the prevailing party in an Extreme Art Studio arbitration recover attorney fees?

According to the 2024 Extreme Art Studio Franchise Disclosure Document, the franchise agreement outlines specific instances where attorney fees can be recovered, but it does not explicitly address the recovery of attorney fees in arbitration. However, the Release agreement does address the recovery of attorney fees.

Specifically, if Extreme Art Studio pursues legal remedies against a franchisee for breach of the Franchise Agreement and prevails, the franchisee agrees to pay Extreme Art Studio's reasonable attorney fees and costs. This provision protects Extreme Art Studio in cases where it has to take legal action to enforce the agreement.

In the context of a release agreement, if legal action is necessary to enforce the terms and conditions, the prevailing party is entitled to recover all reasonable costs and attorney's fees. This clause applies to disputes arising specifically from the release agreement, not necessarily the franchise agreement itself.

Because the FDD does not explicitly address the recovery of attorney fees in arbitration, a prospective franchisee should seek clarification from Extreme Art Studio regarding their policy on this matter. Understanding whether attorney fees are recoverable in arbitration is crucial for assessing the potential financial risks associated with dispute resolution.