In Ledgers arbitration, what is the Arbitrator's role regarding the legal fee Budget?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Your attorney must include in your demand for arbitration an estimate for legal fees ("Budget") necessary to establish liability and damages. The Budget will include the maximum number of: a) witness, b) experts and c) documents. The Arbitrator will evaluate the Budget for proportionality to the Cure. The Budget must be approved by the Arbitrator, before conducting any discovery, or hearings. The Arbitrator must approve any increases in the Budget.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, if a matter proceeds to arbitration, the prospective franchisee's attorney must submit a legal fee estimate, referred to as a "Budget", which includes the anticipated costs for witnesses, experts, and documents necessary to establish liability and damages.
The arbitrator's role is to assess this budget for proportionality to the potential resolution or "Cure" of the dispute. Before any discovery or hearings can take place, the arbitrator must approve the initial budget. Furthermore, any subsequent increases to the budget also require the arbitrator's approval.
This process is designed to ensure that legal fees remain reasonable and proportionate to the issue at hand. It also gives the arbitrator oversight regarding the costs incurred during the arbitration process. This requirement could help control costs and prevent excessive legal spending, but it also adds a layer of complexity to the arbitration process, as franchisees must get approval for their legal budgets and any increases to them.