Does the Mr. Sandless agreement allow for the inclusion of attorney's fees in the Indebtedness?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
We shall keep in a separate account all monies generated by the operation of your Business, less the expenses of the Business, including reasonable compensation and expenses for our representatives. In the event of our exercise of the Step-In Rights**,** you agree to hold harmless us and our representatives for all actions occurring during the course of such temporary operation. You agree to pay all of our reasonable attorneys' fees and costs incurred as a consequence of our exercise of the Step-In Rights. Nothing contained herein shall prevent us from exercising any other right which we may have under this Agreement, including, without limitation, termination.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, franchisees may be responsible for covering the franchisor's attorney's fees in specific circumstances.
Specifically, Mr. Sandless states that a franchisee agrees to pay all of their reasonable attorneys' fees and costs if Mr. Sandless exercises its Step-In Rights. Step-In Rights likely refer to a situation where Mr. Sandless temporarily takes over the operation of the franchisee's business.
This means that if Mr. Sandless has to step in and operate the business, the franchisee will be responsible for covering the legal costs Mr. Sandless incurs during that process. This could potentially add a significant financial burden on the franchisee in addition to any other issues that led to Mr. Sandless needing to take over the business operations.