Under what circumstances related to intellectual property will disputes involving Body20 NOT be resolved through arbitration?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, certain disputes, particularly those concerning intellectual property, are not subject to mandatory arbitration unless Body20 consents to it. Specifically, disputes that arise under or are related to the Lanham Act, those that relate to the ownership or validity of any of Body20's intellectual property, and those that involve the enforcement of Body20's intellectual property rights or the protection of its proprietary information will not be resolved through arbitration.
This means that Body20 franchisees may find themselves in court rather than in arbitration for these specific types of disputes. The FDD specifies that any litigation under this subsection will be filed exclusively in the United States District Court for the district in which Body20 has its principal place of business at the time of filing, or the state court in which Body20 has its principal place of business at the time of filing if federal jurisdiction cannot be obtained. The franchisee irrevocably consents to these courts' jurisdiction.
This clause is significant because it gives Body20 more control over disputes related to its intellectual property. Intellectual property is a critical asset for any franchise system, and this provision allows Body20 to protect those assets through litigation if it deems necessary. Franchisees should be aware of this provision and understand that disputes over intellectual property may be handled differently than other types of disputes under the franchise agreement.