Is mediation required for a Fitstop dispute involving a violation of the restrictive covenants in the Franchise Agreement?
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, mediation is not required if the dispute involves a violation of the restrictive covenants in the Franchise Agreement. Fitstop is not obligated to attempt mediation if the dispute concerns an allegation that a party has violated any of the restrictive covenants contained in the agreement.
Fitstop can seek injunctive relief in court for violations of restrictive covenants, without needing to first go through mediation. This means Fitstop can immediately pursue legal action to stop a franchisee from violating these covenants.
This approach is intended to protect Fitstop's interests by allowing swift action against franchisees who violate the terms of the agreement, particularly those related to competition and confidential information. Prospective franchisees should understand that Fitstop reserves the right to bypass mediation and pursue immediate legal remedies for such violations.