How Much Does Franchise Litigation Cost?

Franchise litigation encompasses legal disputes arising within the franchise business model, often involving franchisors, franchisees, and associated parties.

These disputes can span a variety of issues, including contractual breaches, intellectual property disputes, and alleged violations of franchise agreements.

In this overview, we break down the costs, timelines, and scope of work involved in litigating a franchise dispute.

The scope and cost of a franchise litigation dispute can vary significantly depending on the following factors:

• the complexity and importance of the facts, evidence, and legal issues in the dispute;
• the amounts in dispute;
• the complexity of the proceeding;
• if there are related proceedings;
• the number of procedural steps that have to be taken or that the opposing party takes;
• any party’s denial of or refusal to admit anything that should have been admitted;
• the conduct of any party that tends to shorten or lengthen unnecessarily the duration of the proceeding, and
• any other relevant factor that can affect the legal fees or overall costs of the litigation.

The following is a general outline of the scope of possible steps that may be involved in a franchise litigation case. It is provided solely for informational purposes as a general rough outline of what to expect when pursuing or defending a franchise dispute through court litigation.

This general outline is provided subject to the following conditions:

1. This scope is general. It is not specific to any particular case. It is intended to provide a general sense of what steps and effort may possibly be involved in a case. Therefore, it is not intended to be read or relied on as legal advice.
2. Any particular case may include some or all of the steps listed below, or additional steps not listed below.
3. Each legal case is unique and will have its own circumstances. Each case will result in different fees and overall costs, depending on many factors, including those listed above.
4. This general scope is subject to change without notice.

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What is Involved in Litigating a Franchise Dispute

i. Notices – Claim and Response

Scope of pleadings:

• 1-3 days principal, associate lawyer, and litigation clerk.

Key activities include:

• Analysis of key facts in the dispute (initial analysis, to be refined as more evidence becomes available).
• Analysis of additional facts about key events to draft either a statement of claim or a statement of defense (for fulsome cases).
• Drafting statement of claim or statement of defence.
• Initial correspondence with opposing counsel about procedure (for summary proceedings).

ii. Discovery (as agreed in the Discovery Plan between the parties’ lawyers)

The following is a fulsome set of discovery steps. The discovery phase in a litigation proceeding will vary widely based on the nature of the case, the parties’ agreement on how to most effectively streamline the discovery phase. As a result, some or all of these steps may be significantly different, possibly more limited, depending on the litigation case.

There are usually three to four phases in discovery.

Discovery Phase 1: Planning and Preparation

Scope of Phase 1:

• ½ day to 1 ½ days principal or associate lawyer
• 3 days litigation clerk.

Key activities include:

• Preparing Documentary Productions – compiling and producing all evidence in the client’s possession control or within their power relevant to any issue in the case (and providing to opposing counsel).
• Preparing Discovery Plan.
• Analyzing the other party’s Documentary Productions for deficiencies.
• Communications with the other parties about scope of Documentary Productions of each side.

Discovery Phase 2: Witness Examination/Questioning

Scope of Phase 2:

• 4 to 5 days principal or associate lawyer
• Plus time by litigation clerk.

Key activities include:

• Preparing for and conducting witness examinations/questioning plus preparation and discussions.
• Preparing clients for, and attending, their witness examinations/questioning plus preparations and discussions.

This can include disbursements for court reporter charges at addition cost for attendance at the examination/questioning or preparation of transcripts of witness examinations/questioning.

Discovery Phase 3: Answering Undertakings Given at Witness Examination/Questioning

Scope of Phase 3

• ½ day to 1 ½ day principal (and associate lawyer where needed)
• 1 ½ days to 3 days litigation clerk

Key activities include:

• Answering undertakings given at examinations/questioning for discovery to provide further evidence.
• Reviewing the other side’s answers to undertakings.
• Dealing with refusals given by each side at examinations for discovery.

Discovery Phase 4 (if applicable): Resolving Disputes About Documentary Productions or Refusals

Scope of Phase 4:

• 1 to 4 days
• Principal or associate lawyer and litigation clerk.

Key activities include:

• Disputes about scope of Documentary Productions and refusals given at examinations/questioning for discovery.

This can include disbursements at additional cost for:

• filing fees (pleadings, motions, etc.)
• process server charges.

iii. Mediation

Scope of mediation:

• 1 ½ to 3 days principal (and associate lawyer where needed)
• ½ day to 2 days litigation clerk.

Key activities include:

• Preparing mediation brief and attending one day mediation session.

Meditator’s fees are charged at additional cost.

Note: mediation can take place at any time in the litigation process, typically after the Discovery phases.

iv. Motions, Applications/Case Conference

Key activities include:

• These can take place at any point in the litigation process.
• Case conferences are with opposing counsel and a judge.
• Standard motion/application/application: 1-5 days*
• Injunction motions or motions for summary judgement: 7 to 20 days*

* This includes time for preparing for and attending witness examinations/questioning which can be significant.

v. Pre-Trial

Scope of pre-trial:

• ½ day to 1 day principal or associate lawyer
• Up to ½ day litigation clerk.

Pre-Trial takes place after all previous stages have been completed.

Key activities include:

• Preparing Pre-Trial brief summarizing our position and the evidence that we intend to present at the trial.
• Attending Pre-trial conference with judge and opposing side to review the case and ensure all steps in the litigation process have been completed and that the case is ready for trial.

vi. Trial – this scope is for a 10-day trial

Scope of a trial:

Preparation and trial attendance:

• 19 days to 25 days principal and associate lawyer as needed
• 6 to 10 days litigation clerk.

Key activities include:

• Preparing all evidence and exhibits for the trial, lining up witnesses, and preparing legal arguments and submissions.
• Prepare for trial.
• Preparing opening submissions, witness examinations, closing submissions.
• Attending trial.

See also: How Much Does Franchise Arbitration Cost?