What are the exceptions to the mandatory mediation requirement for Body20 franchise disputes?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.2 Mandatory Pre-Litigation Mediation. Except as otherwise provided in this Section, prior to filing any proceeding to resolve any dispute based upon, arising out of, or in any way connected with this Agreement, a party must submit the dispute for mediation.
- (c) Exceptions to Mediation. 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.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, prior to initiating any legal proceedings related to the franchise agreement, both parties are generally required to participate in mediation. However, this requirement is not absolute. There are specific exceptions where either Body20 or the franchisee can bypass mediation and proceed directly to litigation or arbitration.
The exceptions to mandatory mediation for Body20 franchise disputes include claims relating to the Marks, which likely refers to trademarks or service marks owned or licensed by Body20. Also, disputes regarding the non-payment or underpayment of any monies due under the Franchise Agreement are exempt from the mediation requirement. This would allow Body20 to quickly pursue legal action to recover unpaid royalties or other fees. Disputes concerning noncompetition covenants are also exempt, allowing Body20 to immediately seek legal remedies if a franchisee violates a non-compete agreement.
Finally, either party can seek temporary restraining orders, preliminary injunctions, or other interim relief from a court without first engaging in mediation. This exception is designed to allow parties to protect their interests and prevent irreparable harm while the underlying dispute is being resolved. These exceptions allow Body20 to protect its brand, revenue, and competitive position without the delay of mandatory mediation.