Does the Fitstop franchise agreement specify any limits on the amount of attorneys' fees that can be recovered?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
nt, which by their terms or by implication apply following the termination of this Agreement shall indeed survive and apply following the termination of this Agreement.
Section 17: Cost of Enforcement and Indemnification
- 17.1 If we institute any action at law or in equity against you to secure or protect our rights under or to enforce the terms of this Agreement, in addition to any judgment entered in our favor, we shall be entitled to recover such reasonable attorneys' fees as may be allowed by the court together with court costs and expenses of litigation.
- 17.2 You agree to be solely responsible for the services and results of services performed at locations where services are performed by you and to hold harmless and indemnify us, including our officers, directors, trustees, shareholders, heirs, executors, administrators, attorneys, successors, assigns, principals, agents, servants, employees, consultants, representatives, parents, owners, brokers, affiliates, subsidiaries, and related entities ("Franchisor Parties"), from any and all claims arising from actions by you, the members you are servicing, or your employees, agents, or representatives including, but not limited to, claims of employment or joint employment.
- ©2024 Fitstop USA, Inc.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to the 2024 Fitstop Franchise Disclosure Document, the franchise agreement does not specify any explicit limits on the amount of attorneys' fees that can be recovered by Fitstop in actions against the franchisee to enforce the agreement. Fitstop is entitled to recover reasonable attorneys' fees as allowed by the court, along with court costs and litigation expenses, if they win a legal action against the franchisee.
Fitstop also requires the franchisee to indemnify them against claims arising from the franchisee's actions, or those of their members, employees, or agents. This indemnification includes attorneys' fees, court costs, and other expenses related to defending against such claims. If Fitstop needs to defend themselves in a lawsuit due to the franchisee's actions, the franchisee is responsible for covering all associated costs, including reasonable attorneys' fees.
Furthermore, the franchisee is responsible for Fitstop's legal costs if the franchisee violates the in-term and post-term covenants against competition. This means that if a franchisee breaches the non-compete agreement, they will have to pay Fitstop's legal fees associated with enforcing those covenants. While the agreement stipulates "reasonable attorneys' fees," it does not provide a specific cap or limit on the amount that can be recovered. This leaves the determination of what is "reasonable" to the discretion of the court.