What is a Fitstop franchisee prohibited from doing before exhausting internal dispute resolution?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
raining 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. 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.
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 exhaust the internal dispute resolution procedure before initiating any action or claim with a third-party mediator or other adjudicating party. This means a Fitstop franchisee must attempt to resolve any claim or dispute related to the Franchised Business or the Franchise Agreement internally with Fitstop's management before seeking external resolution. The franchisee must provide Fitstop with written notice of the claim or dispute as prescribed in Section 19.6 of the agreement and make commercially reasonable efforts to settle the issue internally.
Before commencing any legal action against Fitstop or its affiliates, the franchisee must submit a notice detailing the precise nature and grounds of the claim or dispute. 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.
The franchisee cannot start any action against Fitstop or its affiliates in any court until Fitstop either fails to exercise its option to submit the claim to mediation or the mediation proceedings have been terminated. Termination can occur if the mediator declares that further efforts are not worthwhile or if Fitstop makes a written declaration to that effect. This requirement to exhaust internal dispute resolution and potentially undergo mediation before legal action is a common practice in franchising, intended to save both parties time and money by resolving disputes amicably if possible.