Under what circumstances is Fitstop entitled to recover attorneys' fees from the franchisee?
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. 17.3 If Franchisor Parties shall be subject to any claim, demand, or penalty or become a party to any suit or other judicial or administrative proceeding by reason of any claimed act or omission by you
or your employees or agents, or by reason of any act occurring at the Premises or in connection with the Franchised Business, or by reason of an omission with respect to the business or operation of the Franchise, you shall indemnify and hold Franchisor Parties harmless against all judgments, settlements, penalties, and expenses, including attorneys' fees, court costs, and other expenses of litigation or administrative proceeding, incurred by or imposed on Franchisor Parties in connection with the investigation or defense relating to such claim, litigation, or administrative proceeding.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop can recover reasonable attorneys' fees and court costs from franchisees under specific circumstances. If Fitstop initiates legal action against a franchisee to protect its rights or enforce the franchise agreement's terms, Fitstop is entitled to recover reasonable attorneys' fees as allowed by the court, in addition to any judgment in their favor, as well as court costs and litigation expenses.
Additionally, franchisees are responsible for indemnifying Fitstop against claims arising from the franchisee's actions, the actions of their members, employees, or representatives, or from any act or omission related to the franchise's business or operation. This indemnification includes covering all judgments, settlements, penalties, and expenses, including attorneys' fees and court costs, incurred by Fitstop in connection with investigating or defending against such claims. Franchisees must also defend Fitstop in any lawsuit based on such loss or damage and cover all associated costs and reasonable attorneys' fees. If Fitstop chooses to retain its own counsel, the franchisee must reimburse Fitstop for all reasonable costs and legal fees incurred for that defense in a timely manner.
Furthermore, if a franchisee violates the in-term and post-term covenants against competition, the franchisee is responsible for covering all costs and expenses, including reasonable attorneys' fees and court costs, incurred by Fitstop in enforcing those covenants. This means that if Fitstop has to take legal action to prevent a franchisee from competing unfairly or disclosing confidential information, the franchisee will be responsible for Fitstop's legal expenses.