In a Covered Litigation, does Floors To Go have an obligation to consult with the Floors To Go franchisee?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
Right to Intervene.
We also reserve the right, in an appropriate case, to intervene in the Covered Litigation and/or file amicus briefs rather than exercising our rights pursuant to Subsection 7.12(a)(2) and paying our own attorney's fees and expenses then required.
- b.
If you intend to institute a lawsuit the following shall occur:
Notice and Consent.
You shall not institute any action related in any way to FTG or the operation of your Floors To Go Showroom without prior notice to and consent from us, unless our interests are adverse.
Right to Take Action.
We shall have the right upon such notice to take the action contemplated by you in your name, or if appropriate or possible, in our own name, if we determine it to be reasonably necessary in good faith for the continued protection of other members or the FTG System.
Current Obligation for Costs and Fees.
In the event we exercise such right, then except as provided below, if damages are recovered, we shall pay current the reasonable costs of any such action, including attorneys' fees.
Recovery of Damages and Costs and Fees.
Any recovery of money damages shall be shared pro rata between the parties, as the parties' interests may appear; and in such case, the fees and expenses incurred in obtaining such recovery shall be paid first and shared between the parties on the same pro rata basis, with you reimbursing us for fees and expenses paid.
- c.
In the unlikely event a dispute arises between the parties relating to actions occurring under this Section 7.10 or to apportionment of fees, expenses, or recovery, such dispute shall be submitted to arbitration in accordance with Article14 below.
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
The 2025 Floors To Go Franchise Disclosure Document outlines the procedures for lawsuits initiated by the franchisee. If a Floors To Go franchisee intends to start a lawsuit related to FTG or their Floors To Go Showroom, they must first provide notice to Floors To Go and obtain their consent, unless Floors To Go's interests are adverse to the franchisee.
Floors To Go has the right to take over the action contemplated by the franchisee, either in the franchisee's name or in its own name, if it deems it reasonably necessary to protect other members or the FTG System. If Floors To Go exercises this right, it will cover the reasonable costs of the action, including attorney's fees, if damages are recovered.
Any monetary recovery will be shared pro rata between the franchisee and Floors To Go, based on their respective interests. The fees and expenses incurred to obtain the recovery will be paid first and shared on the same pro rata basis, with the franchisee reimbursing Floors To Go for its share of fees and expenses paid. Any disputes regarding actions taken under this section or the apportionment of fees, expenses, or recovery will be submitted to arbitration.