What is the dependency between Section 19.1 and Section 19.2 in the Fitstop Franchise Agreement?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
and permanent injunctive relief restraining the breach or threatened breach by you and you consent to the issuance of an injunction prohibiting any conduct by you in violation of this Section.
Section 19: Disputes and Dispute Resolution
- 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.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to the 2024 Fitstop Franchise Disclosure Document, Section 19.1 and Section 19.2 outline a specific order for dispute resolution. Section 19.1 mandates that a franchisee must first attempt to resolve any disputes internally with Fitstop's management before pursuing external methods. This involves providing Fitstop with written notice as specified in Section 19.6 and making commercially reasonable efforts to settle the dispute internally.
Section 19.2 details the process of mediation as a means of dispute resolution. However, the Fitstop franchisee is required to exhaust the internal dispute resolution procedure described in Section 19.1 before initiating mediation or any other legal action. This initial step is a prerequisite before involving a third-party mediator or other adjudicating body.
There are exceptions to this requirement. Fitstop is not obligated to undergo mediation if the dispute involves allegations of violations concerning federally protected intellectual property rights, restrictive covenants within the agreement, or the franchisee's payment obligations. In these specific cases, Fitstop can directly pursue other legal remedies without first attempting mediation. This agreement to first attempt resolution of disputes internally and through mediation survives termination or expiration of the Franchise Agreement.