Does Fitstop have to approve of a franchisee's use of separate legal counsel in writing before the franchisee engages counsel for disputes regarding Fitstop Marks?

According to Fitstop's 2024 Franchise Disclosure Document, Fitstop will not reimburse a franchisee for expenses and legal fees for separate, independent legal counsel unless Fitstop approves the franchisee's use of such counsel in writing before the franchisee engages counsel. Fitstop also states that it will not reimburse franchisees for disputes where Fitstop challenges the franchisee's use of Fitstop's Marks.

This means that if a Fitstop franchisee anticipates needing separate legal representation, especially in disputes involving Fitstop's trademarks, they must obtain Fitstop's written approval before hiring an attorney to ensure reimbursement of legal fees. This requirement gives Fitstop control over whether it will cover the franchisee's legal costs, potentially influencing the franchisee's decision to seek independent counsel.

This policy is not uncommon in franchising, as franchisors often want to maintain control over legal matters that could affect the brand. However, it places the franchisee in a position where they need to seek permission from Fitstop before obtaining independent legal advice, which could create a conflict of interest. It is important for a prospective franchisee to understand the circumstances under which Fitstop's approval is likely to be granted or denied.

Prospective franchisees should carefully consider this provision and discuss with Fitstop under what circumstances they would approve the use of separate legal counsel. Understanding Fitstop's criteria for approval is crucial for franchisees to protect their interests while remaining compliant with the franchise agreement.