Does Fitstop have the right to submit unresolved disputes to mediation?
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, Fitstop does have the right to submit unresolved disputes to mediation. Specifically, Fitstop has the irrevocable right to submit matters that are not resolved through internal dispute resolution to non-binding mediation. This mediation will occur at Fitstop's headquarters, following the Commercial Mediation Rules set by the AAA.
Fitstop has 30 days from receiving written notice of a dispute or claim to inform the franchisee in writing if they will exercise their right to submit the matter to mediation. This means that if a franchisee has a dispute with Fitstop, Fitstop can choose to take the issue to mediation after the internal dispute resolution process has failed.
It is important to note that this mediation is non-binding, meaning that the outcome of the mediation is not legally enforceable. However, it is a required step that Fitstop can initiate. Any further legal action would be subject to the choice of forum clause, which dictates that disputes must be initiated in the federal or state court encompassing Los Angeles, California.