Under what circumstances related to Section 17 of the Gokhale Method agreement will the franchisee be responsible for the franchisor's legal costs?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
Except as expressly provided by Section 24.3 hereof, you shall pay all expenses, including attorneys' fees and costs, incurred by us, our Affiliates, and our successors and
- assigns (a) to remedy any of your defaults of, or enforce any of our rights under, this Agreement; (b) to effect termination of this Agreement; and (c) to collect any amounts due under this Agreement.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, franchisees may be responsible for the franchisor's legal costs under specific circumstances. Section 24.7 of the franchise agreement states that the franchisee must cover all expenses, including attorney's fees and costs, incurred by Gokhale Method, its affiliates, and successors.
This obligation arises in three specific scenarios: (a) when Gokhale Method needs to correct any defaults made by the franchisee under the agreement, (b) when Gokhale Method terminates the agreement, and (c) when Gokhale Method has to take action to collect any amounts due from the franchisee under the agreement.
This means that if a Gokhale Method franchisee breaches the franchise agreement, fails to make required payments, or causes the agreement to be terminated, they will be responsible for covering Gokhale Method's legal expenses in addressing these issues. This could potentially include costs related to lawyers, court fees, and other associated expenses. Franchisees should, therefore, ensure they understand and comply with all terms of the agreement to avoid triggering these cost obligations.