Who pays the legal costs in a legal proceeding involving Fly To Fit?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Indemnity | Our costs and losses from any legal action related to the operation of your franchise | On demand | You must indemnify and defend (with counsel reasonably acceptable to us) us and our affiliates against all losses in any action by or against us related to, or alleged to arise out of, the operation of your franchise (unless caused by our misconduct or negligence). |
| Prevailing party's legal costs | Our attorney fees, court costs, and other expenses of a legal proceeding, if we are the prevailing party | On demand | In any legal proceeding (including arbitration), the losing party must pay the prevailing party's attorney fees, court costs and other expenses. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the responsibility for legal costs in a legal proceeding depends on who prevails in the action. If Fly To Fit wins a legal proceeding, the losing party is responsible for Fly To Fit's attorney fees, court costs, and other expenses. This includes any legal proceeding, including arbitration. This is a fairly standard clause in franchise agreements.
Additionally, the franchisee must indemnify Fly To Fit and its affiliates against all losses in any action by or against them related to the operation of the franchise. This means the franchisee is responsible for defending Fly To Fit (with counsel reasonably acceptable to Fly To Fit) and covering their costs and losses. However, there is an exception: the franchisee is not responsible if the action is caused by Fly To Fit's misconduct or negligence.
These provisions mean that a Fly To Fit franchisee could face significant legal expenses if they are involved in a dispute with Fly To Fit or if a third party sues Fly To Fit over something related to the franchisee's business operations. It is important for prospective franchisees to understand these potential liabilities and to factor them into their financial planning. Franchisees should consult with an attorney to fully understand their obligations under the franchise agreement.