What is the process for a Floors To Go franchisee to get consent to institute a lawsuit?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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)
According to the 2025 Floors To Go FDD, a franchisee must provide prior notice to and obtain consent from Floors To Go before instituting any lawsuit related to FTG or the operation of their Floors To Go Showroom, unless Floors To Go's interests are adverse to the franchisee.
Floors To Go has the right, upon receiving notice from the franchisee, to take the action contemplated by the franchisee in the franchisee's name or, if appropriate, in Floors To Go's own name. This is if Floors To Go determines it to be reasonably necessary for the continued protection of other members or the Floors To Go System.
If Floors To Go exercises its right to take action, it will pay the reasonable costs of such action, including attorneys' fees, if damages are recovered. Any recovery of money damages will be shared pro rata between the parties based on their interests. The fees and expenses incurred in obtaining the recovery will be paid first and shared between the parties on the same pro rata basis, with the franchisee reimbursing Floors To Go for fees and expenses paid. Any disputes relating to actions under this section or the apportionment of fees, expenses, or recovery will be submitted to arbitration.