Does the Body20 franchise agreement specify that disputes related to intellectual property rights are not subject to arbitration?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
tor 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; (iii) disputes that involve enforcement of our intellectual property rights or protection of our Proprietary Information; or (iv) disputes related to the payment of sums you owe us or our affiliates. Any litigation under this subsection will be filed exclusively in the United States District Court for the district in which we have our principal place of business at the time of filing (or, if federal jurisdiction cannot be obtained, the state court in which we have our principal place of business at the time of filing), and you irrevocably consent to these courts' jurisdiction over you.
- (e) Injunctive Relief. Notwithstanding our agreement to arbitrate, either party will have the right to seek temporary restraining orders and temporary or preliminary injunctive relief from a court of competent jurisdiction with respect to any dispute subject to arbitration;
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, certain disputes, including those related to intellectual property, are not subject to arbitration unless Body20 consents to it. Specifically, disputes arising under the Lanham Act, those related to the ownership or validity of Body20's intellectual property, and those involving the enforcement of Body20's intellectual property rights or protection of its proprietary information are excluded from mandatory arbitration.
This means that Body20 retains the right to pursue intellectual property disputes in court rather than through arbitration, which is a common practice to protect their brand and proprietary systems. If a franchisee were to infringe on Body20's trademarks or proprietary information, Body20 could choose to litigate the matter in a United States District Court, specifically the one in the district where Body20 has its principal place of business. The franchisee, by signing the agreement, consents to the jurisdiction of these courts.
However, even with the agreement to arbitrate, both Body20 and the franchisee have the right to seek temporary restraining orders and preliminary injunctive relief from a court while simultaneously submitting the dispute for arbitration. This allows Body20 to quickly address potential intellectual property violations while the arbitration process is ongoing. The arbitrator's decision is binding, providing a final resolution to the dispute, but the initial court actions can provide immediate protection for Body20's intellectual property.