In a dispute between Pearce Bespoke and a franchisee, who is responsible for covering attorney's fees?

According to Pearce Bespoke's 2025 Franchise Disclosure Document, the responsibility for covering attorney's fees in a dispute hinges on who prevails in the legal action. The FDD states that the non-prevailing party is responsible for covering all costs and expenses, including reasonable attorney's fees, incurred by the prevailing party. This applies to any arbitration or action in court between Pearce Bespoke and its franchisees.

This arrangement means that if a franchisee sues Pearce Bespoke and wins, Pearce Bespoke would have to pay the franchisee's legal fees. Conversely, if Pearce Bespoke wins a lawsuit against a franchisee, the franchisee would be responsible for Pearce Bespoke's legal costs. This creates a financial risk for both parties involved in a dispute, as the cost of legal representation can be significant.

It is important to note that this clause encourages both Pearce Bespoke and its franchisees to carefully consider the merits of their case before initiating legal action. The potential financial burden of covering the opposing party's legal fees if they lose could deter frivolous lawsuits and encourage parties to seek amicable resolutions through negotiation or mediation. This is a fairly standard clause in franchise agreements, designed to allocate the costs of legal disputes to the party that is ultimately found to be in the wrong.