In the event of a dispute, does the Hydrodog Franchise Agreement specify whether litigation or arbitration expenses include paralegal fees?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
In any action or dispute, at law or in equity, that may arise under or otherwise relate to this Agreement, the prevailing party will be entitled to full reimbursement of its litigation or arbitration expenses from the other party.
Litigation or arbitration expenses include attorneys' fees, costs, arbitration fees, expert witness fees and other related expenses including paralegal fees, travel and lodging expenses and court and arbitration filing costs.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, in the event of a dispute, the prevailing party may be entitled to reimbursement of litigation or arbitration expenses. These expenses specifically include attorneys' fees, costs, arbitration fees, expert witness fees, and other related expenses, including paralegal fees, travel and lodging expenses, and court and arbitration filing costs. This means that if a Hydrodog franchisee wins a legal dispute with the franchisor, Hydrodog, they may be able to recover the costs associated with paralegal services used during the litigation or arbitration.
Furthermore, the FDD states that if a claim for amounts owed by the franchisee to Hydrodog or its affiliates is asserted in any legal or arbitration proceeding, or if either party is required to enforce the Franchise Agreement in a judicial or arbitration proceeding, the prevailing party will be entitled to reimbursement of all costs and expenses. These costs and expenses include reasonable accounting and attorneys' fees, expert witness fees, court costs, and other litigation expenses. The attorneys' fees will include reasonable legal fees charged by attorneys, paralegal fees, and costs and disbursements, whether incurred prior to, or in preparation for, or contemplation of, the filing of written demand or claim, action, hearing, or proceeding to enforce the obligations of the parties under the Franchise Agreement.
This clause is significant for prospective Hydrodog franchisees as it clarifies the extent of recoverable expenses in case of legal disputes. It explicitly includes paralegal fees, which can be a substantial part of litigation costs. Franchisees should be aware of this provision, as it could potentially reduce their financial burden if they prevail in a dispute with Hydrodog. However, it also means that if Hydrodog prevails, the franchisee may be responsible for covering these costs for Hydrodog.