Where will the non-binding mediation for Fitstop disputes be conducted?
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. |
|---|---|---|
| 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. |
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, non-binding mediation will be conducted at Fitstop's headquarters. Specifically, if internal dispute resolution fails, Fitstop has the right to submit the matter to non-binding mediation. This mediation will take place at the franchisor's then-current headquarters and will follow the Commercial Mediation Rules set by the AAA (American Arbitration Association). Fitstop has 30 days from receiving written notice of a dispute to decide whether to submit the issue to mediation.
For a prospective Fitstop franchisee, this means that if a dispute arises that cannot be resolved internally, Fitstop has the option to require mediation at their headquarters. This could involve travel and associated expenses for the franchisee, depending on their location relative to Fitstop's headquarters. While the mediation is non-binding, meaning the outcome is not legally enforced, it is a mandatory step initiated by Fitstop before further legal action can be taken.
It is important for potential franchisees to consider the implications of this clause, including the potential costs and inconvenience of traveling to Fitstop's headquarters for mediation. Understanding the mediation process and the rules of the AAA can also help franchisees prepare for possible disputes. Franchisees should also be aware that the choice of forum for any subsequent legal disputes is in Los Angeles, California, which could add further expense and complexity to resolving disagreements.