Does the Fitstop franchise agreement include a waiver of class actions?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 19.11 WAIVER OF CLASS ACTIONS. THE PARTIES AGREE THAT ALL PROCEEDINGS ARISING OUT OF OR RELATED TO THIS AGREEMENT, OR THE SALE OF THE FRANCHISED BUSINESS, WILL BE CONDUCTED ON AN INDIVIDUAL, NOT A CLASS-WIDE BASIS, AND THAT ANY PROCEEDING BETWEEN (A) YOU OR YOUR FRANCHISE OWNERS, AND (B) US OR ANY OF OUR AFFILIATES/OFFICERS/PERSONNEL, MAY NOT BE CONSOLIDATED WITH ANY OTHER PROCEEDING BETWEEN US AND ANY OTHER THIRD PARTY.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the franchise agreement includes a waiver of class actions. This means that any legal proceedings related to the franchise agreement or the sale of the franchised business must be conducted on an individual basis, not as part of a class action lawsuit.
Specifically, the agreement states that franchisees cannot consolidate their proceedings against Fitstop with any other third party. This prevents a franchisee from joining forces with other franchisees or parties to pursue a collective legal claim against Fitstop.
This waiver has significant implications for prospective franchisees. It limits their ability to participate in class action lawsuits against Fitstop, potentially reducing their leverage in legal disputes. While individual legal action remains an option, it can be more expensive and time-consuming than participating in a class action. Franchisees should carefully consider this provision and its potential impact on their legal rights before entering into the agreement.