What is the initial step required when a Fitstop franchisee has a dispute related to the Franchise Agreement?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
| s. Modification of the agreement | Sections 5.2, 20.4 | No modifications generally except by written agreement, but we may change the Operations Manuals and Franchise System standards at any time. You will be required to implement these changes at your own cost. |
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| t. Integration/merger clause | Section 20.2 | Only the terms of the Franchise Agreement (including the Operations Manuals) are binding (subject to state law). Any other promises may not be enforceable. No claim made in any franchise agreement is intended to disclaim the express representations made in this Franchise Disclosure Document. |
| u. Dispute resolution by arbitration or mediation | Section 19.1.1 | You must submit any disputes, claims and/or causes of action you have arising out of or related to the Franchise Agreement to our management for review and subsequent discussions regarding the same, and you agree to attempt to resolve any such matters internally prior to submitting any such matter to mediation. |
| Section 19.1.2 | We have the irrevocable right to submit all matters that are not resolved via internal dispute resolution procedures set forth in the Franchise Agreement to non-binding mediation that will be conducted at Franchisor's then-current headquarters and in accordance with the Commercial Mediation Rules promulgated by the AAA. We will have 30 days from the date we receive written notice of any dispute or claim to advise Franchisee in writing that we will be exercising our right to submit this matter to mediation. | |
| v. Choice of forum | 19.4 | Except as otherwise provided in this Chart, any dispute or claim arising out of or related to the Franchise Agreement must be initiated and brought only in the federal or state court encompassing – or closest to – Los Angeles, California. Both parties irrevocably submit to the jurisdiction of such courts, subject to the IDP and mediation provisions set forth above. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–47)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, if a franchisee has a dispute related to the Franchise Agreement, the franchisee must first submit the dispute to Fitstop's management for review and discussions. The franchisee is required to attempt to resolve the issue internally before pursuing mediation.
This initial step of internal dispute resolution is a common practice in franchising, allowing both parties to attempt to resolve disagreements efficiently and cost-effectively. It provides an opportunity for open communication and negotiation before escalating the matter to more formal and potentially expensive processes like mediation or litigation.
If the internal dispute resolution is unsuccessful, Fitstop retains the right to submit the matter to non-binding mediation. This mediation will occur at Fitstop's headquarters and follow the Commercial Mediation Rules set by the AAA (American Arbitration Association). Fitstop has 30 days from receiving written notice of the dispute to decide whether to exercise its right to mediation. Any disputes that proceed beyond mediation must be initiated in the federal or state court closest to Los Angeles, California, and will be subject to California law.