Does Fitstop have other rights or remedies at law or in equity if a franchisee materially breaches the agreement?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 16.1 Termination Upon Notice and Without Opportunity to Cure. The parties agree that the happening of any of the following events shall constitute a material breach of this Agreement and violate the essence of your obligations and, without prejudice to any of our other rights or remedies at law or in equity, we, at our election, may terminate this Franchise for valid cause upon written notice to you, and without an opportunity for you to correct a condition of default, upon the happening of any of the following events:
- 16.1.1 If you are declared bankrupt or judicially determined to be insolvent, or all or a substantial part of your property is assigned to or for the benefit of any creditor or creditors, or if you admit your inability to pay your debts as they become due.
16.7 Franchisor Remedies. In addition to the remedies set forth above, we shall have all other remedies available to us at law or in equity which may apply by virtue of your default.
17.1 If we institute any action at law or in equity against you to secure or protect our rights under or to enforce the terms of this Agreement, in addition to any judgment entered in our favor, we shall be entitled to recover such reasonable attorneys' fees as may be allowed by the court together with court costs and expenses of litigation.
17.2 You agree to be solely responsible for the services and results of services performed at locations where services are performed by you and to hold harmless and indemnify us, including our officers, directors, trustees, shareholders, heirs, executors, administrators, attorneys, successors, assigns, principals, agents, servants, employees, consultants, representatives, parents, owners, brokers, affiliates, subsidiaries, and related entities ("Franchisor Parties"), from any and all claims arising from actions by you, the members you are servicing, or your employees, agents, or representatives including, but not limited to, claims of employment or joint employment.
©2024 Fitstop USA, Inc. 17.3 If Franchisor Parties shall be subject to any claim, demand, or penalty or become a party to any suit or other judicial or administrative proceeding by reason of any claimed act or omission by you
- ©2024 Fitstop USA, Inc. 18.7 Irreparable Harm and Right to Injucntive Relief and Remedies. You acknowledge that a violation of any of the terms of this Section would result in irreparable injury to us for which no adequate remedy at law may be available.
You acknowledge that the Competitive Information described herein has
been developed and compiled through our time and effort in the fitness industry. Accordingly, you acknowledge that, in addition to our remedies at law, we may seek and obtain preliminary and permanent injunctive relief restraining 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.
- ©2024 Fitstop USA, Inc. 19.3 Injunctive Relief. You acknowledge and agree that irreparable harm could be caused to us by your violation of certain provisions of this Agreement and, as such, in addition to any other relief available at law or equity, we shall be entitled to obtain in any court of competent jurisdiction, without bond, restraining orders or temporary or permanent injunctions in order to enforce, among other items, the provisions of this Agreement relating to: (i) your unauthorized use of the Proprietary Marks and Confidential Information (including any proprietary software used in connection with the Franchised Business); (ii) the in-term covenant not to compete, as well as any other violations of the restrictive covenants set forth in this Agreement; (iii) your obligation upon termination or expiration of this Agreement; (iv) disputes and controversies based on or arising under the Lanham Act, or otherwise
involving the Proprietary Marks, as now or hereafter amended; (v) disputes and controversies involving enforcement of our rights with respect to confidentiality under this Agreement; and (vi) to prohibit any act or omission by you or your representatives that constitutes a violation of applicable law, threatens the Franchise System or threatens other System franchisees. Your only remedy if such an injunction is entered will be the dissolution of the injunction, should you prevail in such a proceeding.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Fitstop has several remedies available at law or in equity if a franchisee materially breaches the franchise agreement. Specifically, Fitstop can seek injunctive relief, allowing them to obtain restraining orders or temporary/permanent injunctions from a court to enforce certain provisions of the agreement. This includes issues like unauthorized use of trademarks and confidential information, violations of non-compete clauses, and failure to meet post-termination obligations.
In addition to injunctive relief, Fitstop is entitled to all other remedies available at law or in equity due to a franchisee's default. If Fitstop initiates legal action to protect its rights or enforce the agreement, they can recover reasonable attorneys' fees, court costs, and litigation expenses. The franchisee is also responsible for indemnifying Fitstop against any claims arising from the franchisee's actions or omissions.
Fitstop also emphasizes that a franchisee's violation of restrictive covenants would result in irreparable injury to Fitstop, entitling them to seek preliminary and permanent injunctive relief. The franchisee consents to the issuance of an injunction prohibiting any conduct violating these terms. This comprehensive approach ensures Fitstop can protect its brand, confidential information, and system standards through various legal avenues if a franchisee fails to comply with the agreement.