Does a dispute over a Fitstop franchisee's payment obligations require mediation?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
The Parties will not be required to first attempt to mediate a controversy, dispute, or claim through mediation as set forth in this Section 19.2 ifsuch controversy, dispute, or claim concerns an allegation that a Party has violated (or threatens to violate, or poses an imminent risk of violating): (i) any federally protected intellectual property rights in the Proprietary Marks, System, or in any Confidential Information or other intellectual property rights associated with the same; (ii) any of the restrictive covenants contained in this Agreement; and (iii) any of Franchisee's payment obligations under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, disputes regarding a franchisee's payment obligations do not require mediation. Fitstop is not required to attempt to mediate a dispute if it concerns a franchisee's payment obligations under the agreement.
Fitstop retains the right to seek injunctive relief in court for violations of intellectual property, restrictive covenants, or payment obligations. This means Fitstop can pursue immediate legal action to prevent further breaches without first going through mediation. This approach is common in franchising to protect the brand and ensure franchisees meet their financial commitments.
This clause favors Fitstop, allowing them to quickly address payment issues through the courts, which can be a faster and more decisive route than mediation. Franchisees should be aware that disputes over payments may lead to immediate legal action from Fitstop, potentially incurring legal costs and other penalties.