Who bears the cost of mediation in a Fitstop dispute?

According to Fitstop's 2024 Franchise Disclosure Document, in the event of mediation, each party is responsible for covering their own costs. However, the fees charged by the mediator are to be shared equally between Fitstop and the franchisee. This arrangement applies to any claims or disputes arising from the Franchise Agreement or related agreements that are not resolved through internal dispute resolution.

This cost-sharing arrangement for mediator fees is a fairly standard practice in franchising. It ensures that neither party is unduly burdened by the expense of mediation, encouraging participation in the process. However, franchisees should be aware that they will still be responsible for their own legal fees and other expenses associated with preparing for and participating in the mediation.

It's important to note that Fitstop has the option to require mediation, and this right can be specifically enforced by them. However, neither party is obligated to mediate disputes concerning alleged violations of federally protected intellectual property rights, restrictive covenants, or the franchisee's payment obligations. In these specific cases, Fitstop may pursue other legal avenues without first engaging in mediation.

Prospective Fitstop franchisees should carefully consider these dispute resolution procedures and associated costs. Understanding the financial responsibilities related to mediation, as well as the exceptions where mediation is not required, is crucial for making an informed investment decision.