Under what circumstances is pre-litigation mediation mandatory 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.
- (a) Conduct of Mediation. All parties must attend and participate in the mediation. It is the intent of the parties that mediation shall be held not later than 14 days after a written request for mediation shall have been served on the other parties. The mediation will be held before one mediator selected by the parties, and if the parties cannot agree upon the mediator, then a mediator selected by the American Arbitration Association ("AAA"). The mediation shall not last more than one day and shall be held in the metropolitan area of our thencurrent principal place of business. The mediation shall be governed by the rules of the AAA.
- (b) Post-Mediation. If we and you do not resolve our dispute, then thereafter any party may file for litigation or arbitration, as applicable in accordance with the terms of this Agreement.
- (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, pre-litigation mediation is generally mandatory for resolving disputes related to the franchise agreement. Prior to initiating any legal proceedings arising from or connected to the agreement, either Body20 or the franchisee must first submit the dispute to mediation. This requirement is designed to encourage resolution through a less formal and potentially more amicable process before resorting to litigation or arbitration. All parties are required to attend and participate in the mediation, which should ideally occur within 14 days of a written request for mediation. The mediation will be held before a mediator selected by the parties, or by the American Arbitration Association (AAA) if the parties cannot agree on a mediator. The mediation is limited to one day and will take place in the metropolitan area of Body20's principal place of business. The rules of the AAA will govern the mediation process. If the dispute remains unresolved after mediation, either party may then proceed with litigation or arbitration, as applicable under the terms of the franchise agreement.
However, there are specific exceptions to this mandatory mediation requirement. Body20 or the franchisee are not obligated to mediate claims relating to Body20's trademarks, non-payment or underpayment of monies owed under the agreement, non-competition covenants, or requests for temporary restraining orders, preliminary injunctions, or other interim relief sought in court to preserve the status quo or prevent irreparable harm. These exceptions allow either party to immediately pursue legal action in situations where delay could be detrimental.
This mandatory mediation clause, with its exceptions, is a fairly standard approach in franchise agreements. It aims to balance the benefits of alternative dispute resolution with the need for immediate legal recourse in certain critical situations. Prospective Body20 franchisees should understand these provisions and consider the potential costs and benefits of mediation versus litigation or arbitration when evaluating the franchise agreement.