Does the requirement to attempt internal dispute resolution with Degree Wellness survive the termination of the agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Except insofar as we elect to enforce this Agreement or to seek temporary or permanent injunctive relief as provided in Section 17.8 of this Agreement, before either party commences an arbitration under this Section, the parties agree that, as a condition precedent to the filing or commencement of any arbitration, they will attempt to resolve any dispute through internal mediation between the parties to be conducted in a mutually agreeable location or, if no such location is agreed upon within 10 days after a request for mediation, then at our corporate headquarters.
In the event that no settlement or resolution between the parties can be reached through internal mediation within thirty (30) days following the date on which a written request for internal mediation is made by any party, such dispute shall be submitted for arbitration pursuant to this Section. "Internal mediation" shall consist of, among other things, the parties having reasonable business discussions, whether by telephone or in person, concerning the dispute and means of resolving the same.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees are typically required to attempt internal mediation before commencing arbitration, unless Degree Wellness seeks to enforce the agreement or pursue injunctive relief. Internal mediation involves reasonable business discussions to resolve disputes, either by telephone or in person. This process must occur before either party can start an arbitration.
Specifically, the FDD states that before commencing arbitration, both parties must attempt to resolve any dispute through internal mediation. This mediation should occur in a mutually agreeable location or at Degree Wellness's corporate headquarters if no location is agreed upon within 10 days of the mediation request. If no resolution is reached within 30 days of the written request for internal mediation, the dispute can then be submitted for arbitration.
The Degree Wellness FDD does not explicitly state whether the requirement for internal mediation survives the termination of the franchise agreement. However, the document does state that all obligations that by their nature survive the expiration or termination of the agreement will continue in full force and effect. Therefore, a prospective franchisee should clarify with Degree Wellness whether the internal mediation requirement is intended to survive termination, especially considering that post-termination disputes might arise.
Given this ambiguity, it is crucial for potential Degree Wellness franchisees to seek clarification from the franchisor regarding the survival of the internal mediation requirement post-termination. Understanding whether this obligation continues can significantly impact how disputes are resolved after the franchise relationship ends, potentially affecting legal strategies and costs.