Who bears the cost of mediation for a Fitstop franchise 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 split equally between Fitstop and the franchisee. This agreement to mediate survives any termination or expiration of the Franchise Agreement.

Before initiating any legal action against Fitstop, a franchisee must first submit a detailed notice outlining the nature and grounds of the claim or dispute. Fitstop then has 30 days to decide whether to exercise their right to mediate. During this period, both parties are expected to attempt to resolve the issue internally.

It's important to note that mediation is not required for disputes involving allegations of violations or imminent violations of federally protected intellectual property rights, restrictive covenants, or the franchisee's payment obligations. In these specific cases, Fitstop is entitled to seek injunctive relief in court without first engaging in mediation. This could mean faster and more decisive action in cases where Fitstop believes its core business assets or contractual rights are at immediate risk.

This cost-sharing arrangement for mediation is fairly typical in franchising. It encourages both parties to approach the process seriously and work towards a resolution. However, the franchisee should be aware of the exceptions where Fitstop can bypass mediation and pursue legal action directly, potentially leading to higher costs for the franchisee if they are forced to defend themselves in court.