What arbitration rules govern the arbitration proceedings for Body20 disputes?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
. The obligation to mediate shall not be binding upon either party with respect to claims relating to the Marks, the non-payment or underpayment of any monies due under this Agreement, the noncompetition covenants, or requests by either party for temporary restraining orders, preliminary injunctions or other procedures in a court of competent jurisdiction to obtain interim relief when deemed necessary by such court to preserve the status quo or prevent irreparable injury pending resolution of the actual dispute.
16.3 Arbitration.
- (a) Procedure. Except as stated in Section 16.3(d) (Excepted Disputes), all disputes between you, your Affiliates, Owners, guarantors, and/or your or your Affiliates' officers, directors, and employees, on the one hand, and us, our affiliates, and/or our or our affiliates' officers, directors and employees, on the other hand, relating to this Agreement, our relationship with you, or your Studio will be resolved by binding arbitration. The arbitration proceeding shall be conducted by one arbitrator and in accordance with then-current Commercial Arbitration Rules of the AAA. All arbitration proceedings will be held at AAA's offices or other suitable offices that we select in the metropolitan area in which our principal place of business is then located.
- (b) Individual Actions. We and you agree that arbitration will be conducted on an individual, not a class-wide, basis and that an arbitration proceeding between us and you may not be consolidated with any other arbitration proceeding between us and any other person. Notwithstanding the foregoing or anything to the contrary in this Section 16.3, if any court or arbitrator determines that this prohibition on class-wide arbitration is unenforceable with respect to a dispute that otherwise would be subject to arbitration under this Section 16.3, then the parties agree that this arbitration clause shall not apply to that dispute and that such dispute will be resolved in a judicial proceeding in accordance with Section 16.3(d) (Excepted Disputes).
- (c) Relief. The arbitrator has the right to award or include in his or her award any relief which he or she deems proper, including money damages (with interest on unpaid
amounts from the date due), specific performance, injunctive relief, and attorneys' fees (on a solicitor and its own client basis) and costs, provided that the arbitrator may declare any Mark generic or otherwise invalid or, except as expressly provided in Section 16.5 (Mutual Waiver of Punitive Damages), award any special, consequential, exemplary, or punitive damages against either party (we and you hereby waiving to the fullest extent permitted by law, except as expressly provided in Section 16.5 below, any right to or claim for any special, consequential, exemplary, or punitive damages against the other).
- (d) Excepted Disputes. The following disputes will not be resolved through arbitration unless we consent to arbitration: (i) disputes that arise under or are related to the Lanham Act, as now or later amended; (ii) disputes that otherwise relate to the ownership or validity of any of the Intellectual Property;
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, arbitration proceedings will be conducted by a single arbitrator and will adhere to the then-current Commercial Arbitration Rules of the AAA (American Arbitration Association). The proceedings will take place at AAA's offices or other suitable offices selected by Body20 in the metropolitan area where Body20's principal place of business is located. This means that any disputes arising from the franchise agreement or the franchisee's relationship with Body20 will be subject to this arbitration process, providing a structured method for resolving conflicts outside of court.
Body20 and its franchisees agree that arbitration will be conducted on an individual basis, not as part of a class-wide action. This prevents franchisees from consolidating their arbitration proceedings with others against Body20. However, if a court or arbitrator determines that the prohibition on class-wide arbitration is unenforceable, the arbitration clause will not apply to that specific dispute, and it will be resolved in a judicial proceeding. This clause ensures that disputes are handled individually unless the class-wide arbitration ban is deemed unenforceable.
The arbitrator has the authority to award various forms of relief, including money damages with interest, specific performance, injunctive relief, and attorneys' fees and costs. However, the arbitrator cannot declare any Mark generic or otherwise invalid, or award any special, consequential, exemplary, or punitive damages against either party, except as expressly provided in Section 16.5 (Mutual Waiver of Punitive Damages). This limitation on damages is a significant consideration for prospective franchisees, as it restricts the potential financial recovery in case of a dispute.
Prior to initiating any legal proceedings, including arbitration, both parties are required to participate in mandatory pre-litigation mediation. This mediation must occur no later than 14 days after a written request is served, and it is intended to be completed in one day. The mediation will be governed by the rules of the AAA and will take place in the metropolitan area of Body20's principal place of business. However, there are exceptions to this mediation requirement for claims relating to the Marks, non-payment of monies, non-competition covenants, or requests for temporary restraining orders or preliminary injunctions, allowing parties to seek immediate relief in certain situations.