What is the effect of a Fitstop franchisee failing to comply with the provisions of the Right of First Refusal?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
enforcement of us of the covenants in this Section. You agree to pay all costs and expenses (including reasonable attorneys' fees and all costs of court) incurred by us in connection with the enforcement of this Section of this Agreement.
- ©2024 Fitstop USA, Inc. 18.7 Irreparable Harm and Right to Injucntive Relief and Remedies. You acknowledge that a violation of any of the terms of this Section would result in irreparable injury to us for which no adequate remedy at law may be available. You acknowledge that the Competitive Information described herein has
been developed and compiled through our time and effort in the fitness industry. Accordingly, you acknowledge that, in addition to our remedies at law, we may seek and obtain preliminary 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.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if a franchisee violates certain provisions of the franchise agreement, including those related to the Right of First Refusal, Fitstop may suffer irreparable harm. In such cases, Fitstop is entitled to seek injunctive relief from a court of competent jurisdiction, without needing to post a bond. This means Fitstop can obtain court orders, such as restraining orders or temporary or permanent injunctions, to enforce the franchisee's obligations.
These injunctions can prevent a franchisee from taking actions that violate the agreement. The franchisee's only recourse if an injunction is issued is to seek its dissolution by prevailing in a legal proceeding. This highlights the importance of franchisees fully understanding and complying with all terms of the franchise agreement, especially those concerning intellectual property, restrictive covenants, and payment obligations.
Fitstop also has the right to reduce the scope of any covenant set forth in this Section without the franchisee's consent effective immediately upon written notice to the franchisee. The franchisee agrees to comply with any covenant as so modified, which modified covenant shall be fully enforceable notwithstanding the provisions of any other Sections hereof. The franchisee expressly agrees that the existence of any claims that they or their employees may have against Fitstop, whether or not arising from this Agreement, shall not constitute a defense to the enforcement of Fitstop of the covenants in this Section. The franchisee agrees to pay all costs and expenses (including reasonable attorneys' fees and all costs of court) incurred by Fitstop in connection with the enforcement of this Section of this Agreement.