Does the mediation requirement apply to all disputes between Basecamp Fitness and its franchisees?
Basecamp_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
CALIFORNIA ADDENDUM TO FRANCHISE AGREEMENT
Notwithstanding anything to the contrary set forth in the Basecamp Fitness Franchisor LLC Franchise Agreement, the following provisions shall supersede and apply to all Basecamp Fitness franchises offered and sold in the state of California:
This California Addendum is only applicable if you are a resident of California or if your business is located in California.
The California Franchise Relations Act (Business and Professions Code Section 20000 through 20043), provides franchisees with additional rights concerning termination and non-renewal of the Franchise Agreement and certain provisions of the Franchise Agreement relating to termination and nonrenewal may be superseded by the Act.
There may also be court decisions which may supersede the Franchise Agreement and your relationship with Franchisor, including the areas of termination and renewal of Franchisee's franchise.
If the Franchise Agreement is inconsistent with the law, the law will control.
The Franchise Agreement requires Franchisee to execute a general release of claims upon renewal or transfer of the Franchise Agreement.
California Corporations Code Section 31512 provides that any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of that law or any rule or order thereunder is void.
Section 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code Section 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 - 20043)).
To the extent required by such laws, Franchisee shall not be required to execute a general release.
The Franchise Agreement requires application of the laws and forum of Minnesota.
This provision may not be enforceable under California law.
The Franchise Agreement contains a covenant not to compete which extends beyond the termination of the franchise.
This provision may not be enforceable under California law.
The provision in the Franchise Agreement which terminates the franchise upon the bankruptcy of the Franchisee may not be enforceable under Title 11, United States Code, Section 101.
The Franchise Agreement contains a waiver of punitive damages and jury trial provision.
These waivers may not be enforceable under California law.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
Based on the 2025 Basecamp Fitness Franchise Disclosure Document, the availability of mediation and arbitration, and the specific terms governing these processes, can vary significantly depending on the franchisee's location. For instance, the California Addendum notes that the Franchise Agreement mandates the application of Minnesota laws and forum, but this may not be enforceable under California law. Similarly, the Franchise Agreement requires binding arbitration to occur in Minneapolis, Minnesota; however, the enforceability of such provisions can differ based on state and federal laws.
For franchisees in Illinois, any provision designating jurisdiction and venue outside of Illinois is void, although arbitration outside the state may be permissible. The Illinois Addendum also specifies that Illinois law governs the Franchise Agreement, and franchisees' rights upon termination and non-renewal are protected under the Illinois Franchise Disclosure Act.
In Minnesota, the FDD states that the franchisor cannot require litigation to be conducted outside of Minnesota, and the agreement cannot reduce any rights provided under Minnesota Statutes, Chapter 80C. These state-specific addenda highlight the importance of consulting with legal counsel to understand how local laws affect the enforceability and interpretation of the franchise agreement's dispute resolution provisions. Therefore, it is not clear if the mediation requirement applies to all disputes between Basecamp Fitness and its franchisees.