Does the Basecamp Fitness franchise agreement include a waiver of collateral estoppel?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
- G.
Waiver of Collateral Estoppel.
The parties agree they should each be able to settle, mediate, litigate, arbitrate, or compromise disputes in which they are involved with third parties, without having those disputes directly affect the contract or relationship between us.
We and you therefore each agree that a decision of an arbitrator or court of law to which one of us is not a party will not prevent the person that was a party to such action from making similar arguments, or taking similar positions, in any action between us.
You and we therefore each waive the right to assert that principles of collateral estoppel prevent either you or us from raising any claim or defense in an action between us if either you or we lost a similar claim or defense in another action.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Basecamp Fitness's 2025 Franchise Disclosure Document, the franchise agreement includes a waiver of collateral estoppel. This waiver means that Basecamp Fitness and the franchisee agree that any decisions made in disputes involving third parties will not automatically apply to disputes between them.
In practical terms, this allows both Basecamp Fitness and the franchisee to argue their cases independently, even if similar issues have been decided in other legal proceedings. This is designed to ensure that settlements, mediations, or judgments in cases involving other parties do not unfairly influence the outcome of disputes specifically between the franchisor and franchisee.
The FDD states, "The parties agree they should each be able to settle, mediate, litigate, arbitrate, or compromise disputes in which they are involved with third parties, without having those disputes directly affect the contract or relationship between us." This clause protects both parties from being bound by decisions in cases where they were not directly involved, allowing for a fresh assessment of the specific facts and circumstances in any dispute between Basecamp Fitness and its franchisees.
This waiver of collateral estoppel is intended to give both Basecamp Fitness and its franchisees flexibility in resolving disputes and ensures that each case is evaluated on its own merits. However, franchisees should be aware of this provision and understand its implications, particularly if they anticipate disputes that might overlap with issues in other legal cases involving the franchisor or other franchisees.