Before bringing a claim to a third-party mediator, what internal dispute resolution procedure must a Fitstop franchisee exhaust?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 19.1 Internal Dispute Resolution. You must first bring any claim or dispute arising out of or related to the Franchised Business and/or this Agreement to our management after you have provided us with written notice as prescribed in Section 19.6 of this Agreement, and subsequently make every commercially reasonable effort to settle any such dispute or claim internally.
You must exhaust this internal dispute resolution procedure before bringing any action or claim before a third-party mediator or other adjudicating party.
This agreement to first attempt resolution of disputes internally shall survive termination or expiration of this Agreement.
- 19.2 Mediation. At our option, all claims or disputes between you and us (and/or our affiliates) arising out of, or in any way relating to, this Agreement or any other agreement by and between such parties, or any of the parties' respective rights and obligations arising from such agreement, which are not first resolved through the internal dispute resolution procedure sent forth in Section 19.1 above, will be submitted first to mediation to take place at our then-current corporate headquarters under the auspices of the American Arbitration Association ("AAA"), in accordance with AAA's Commercial Mediation Rules then in effect.
Before commencing any legal action against us and/or our affiliates with respect to any such claim or dispute, you must submit a notice to us that specifies in detail the precise nature and grounds of such claim or dispute per Section 19.6 below.
W e will then have a period of 30 days following receipt of such notice within which to notify you as to whether we and/or our affiliates are exercising the right to mediate under this Section (the "Applicable Notice Period").
During the Applicable Notice Period, both parties will attempt to resolve the matter internally per Section 19.1 above.
You may and must not commence any action against us or our affiliates with respect to any claim or dispute in any court, unless and until: (i) we fail to exercise its option to submit such claim or dispute to mediation; or (ii) such mediation proceedings have been terminated either (a) as the result of a written declaration of the mediator(s) that further mediation efforts are not worthwhile, or (b) as a result of a written declaration by us.
Our option and right to mediate as set forth herein may be specifically enforced by us.
Each Party will bear its own cost of mediation, with you and us equally sharing the mediator fees.
This agreement to mediate will survive any termination or expiration of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, a franchisee must first attempt to resolve any claims or disputes internally with Fitstop's management before seeking third-party mediation or other adjudication. This involves providing Fitstop with written notice as prescribed in Section 19.6 of the agreement and making commercially reasonable efforts to settle the dispute internally.
This internal dispute resolution procedure must be exhausted before initiating any action or claim with a third-party mediator or other adjudicating body. The agreement to attempt internal resolution survives any termination or expiration of the Franchise Agreement.
Before commencing any legal action against Fitstop, a franchisee must submit a notice detailing the precise nature and grounds of the claim or dispute, as per Section 19.6. Fitstop then has 30 days to decide whether to exercise its right to mediate. During this period, both parties are expected to attempt to resolve the matter internally, as described in Section 19.1.
The franchisee cannot start any action against Fitstop in any court until Fitstop either declines to mediate or the mediation proceedings are terminated, either by the mediator's declaration that further efforts are not worthwhile or by Fitstop's written declaration. Fitstop's right to mediate can be specifically enforced by them. Each party bears its own mediation costs, while the mediator fees are shared equally between the franchisee and Fitstop. This mediation agreement survives any termination or expiration of the Franchise Agreement.