What costs are the Fitstop franchisee responsible for if Fitstop has to enforce the restrictive covenants?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
You agree to pay all costs and expenses (including reasonable attorneys' fees and all costs of court) incurred by us in connection with the enforcement of this Section of this Agreement.
- ©2024 Fitstop USA, Inc. 18.7 Irreparable Harm and Right to Injucntive Relief and Remedies. You acknowledge that a violation of any of the terms of this Section would result in irreparable injury to us for which no adequate remedy at law may be available.
You acknowledge that the Competitive Information described herein has
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if Fitstop has to take action to enforce the restrictive covenants outlined in the franchise agreement, the franchisee is responsible for covering all associated costs and expenses. This includes reasonable attorneys' fees and all costs of court incurred by Fitstop during the enforcement process. This means that in addition to any judgment entered in Fitstop's favor, the franchisee will be liable for the legal expenses Fitstop incurs while protecting its rights.
This obligation exists regardless of any claims the franchisee may have against Fitstop. The existence of such claims does not constitute a defense against Fitstop's enforcement of the restrictive covenants. This could include disputes over the franchise agreement itself or any other issues arising from the franchise relationship. The franchisee cannot withhold compliance or payment based on these claims.
This provision is fairly standard in franchise agreements, as franchisors need to protect their brand standards, trade secrets, and competitive advantages. Restrictive covenants, such as non-compete clauses, are crucial for maintaining the integrity of the franchise system. The franchisee's responsibility for enforcement costs ensures that Fitstop can vigorously defend these covenants without incurring financial losses, which could discourage them from protecting the system.