What is the consequence if either Basecamp Fitness or the franchisee initiates litigation or arbitration without first attempting mediation?

Based on the 2025 Basecamp Fitness Franchise Disclosure Document, the document does not specify any consequences for initiating litigation or arbitration without first attempting mediation. The FDD does mention binding arbitration, to occur at the American Arbitration Association in Minneapolis, Minnesota. The FDD also states that the franchisee will bear all costs of arbitration if Basecamp Fitness secures any relief against them in the arbitration, or are successful in defending a claim the franchisee brings against them in the arbitration.

It is common practice for franchise agreements to include clauses that encourage mediation or other forms of alternative dispute resolution before resorting to litigation or arbitration. These clauses often include specific procedures for initiating mediation, such as providing notice to the other party and agreeing on a mediator.

Since the Basecamp Fitness FDD does not detail the consequences for bypassing mediation, prospective franchisees should inquire with the franchisor about their specific policies and procedures for dispute resolution. Understanding these procedures can help franchisees avoid potential legal complications and maintain a positive relationship with Basecamp Fitness.