In Stretch Zone arbitration, who is responsible for reimbursing arbitration costs to the prevailing party?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Arbitration Costs. Each party will initially pay one-half of the costs of the filing fee and the fees for the arbitrator subject to reimbursement by the non-prevailing party to the prevailing party as determined by the arbitrator. If either party fails to pay its, his or her share of any arbitration fee or deposit, the other party who has paid its, his or her share may move for the arbitrator to issue an award on liability but the arbitrator will conduct a separate hearing to determine damages or other relief.
- (c) Prevailing Party. If any arbitration or legal action is permitted and instituted under Sections 17.3 or 17.4, the Prevailing Party is entitled to recover reasonable pre-institution and postinstitution attorneys' fees, court costs and all expenses even if not taxable as court costs (including all fees and expenses incident to arbitration, appellate, bankruptcy and post-judgment proceedings), incurred in the action or proceeding, in addition to any other relief that the party is entitled. Attorneys' fees include paralegal fees, administrative costs, investigative costs, costs of expert witnesses, court reporter fees, sales and use taxes, if any, and all other charges billed by the attorneys to the Prevailing Party.
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the non-prevailing party in an arbitration is responsible for reimbursing certain costs to the prevailing party. Initially, both parties involved in the arbitration are expected to pay one-half of the filing fee and the arbitrator's fees. However, the arbitrator will determine which party is the prevailing party, and the non-prevailing party will then be required to reimburse the prevailing party for these initial costs.
Furthermore, if a party fails to pay their share of any arbitration fee or deposit, the other party has the option to pay the full amount and request the arbitrator to issue an award on liability against the non-paying party. In this case, the arbitrator will conduct a separate hearing to determine damages or other relief.
In any permitted arbitration or legal action, the prevailing party is entitled to recover reasonable attorneys' fees, court costs, and all expenses, even those not typically taxable as court costs. This includes all fees and expenses related to arbitration, appellate, bankruptcy, and post-judgment proceedings. The attorneys' fees can include paralegal fees, administrative costs, investigative costs, expert witness costs, court reporter fees, sales and use taxes, and all other charges billed by the attorneys to the prevailing party. This comprehensive coverage of costs aims to ensure that the prevailing party is fully compensated for the expenses incurred during the dispute resolution process.