What is the role of the American Arbitration Association (AAA) in Fitstop dispute resolution?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 19.2 Mediation. At our option, all claims or disputes between you and us (and/or our affiliates) arising out of, or in any way relating to, this Agreement or any other agreement by and between such parties, or any of the parties' respective rights and obligations arising from such agreement, which are not first resolved through the internal dispute resolution procedure sent forth in Section 19.1 above, will be submitted first to mediation to take place at our then-current corporate headquarters under the auspices of the American Arbitration Association ("AAA"), in accordance with AAA's Commercial Mediation Rules then in effect.
Before commencing any legal action against us and/or our affiliates with respect to any such claim or dispute, you must submit a notice to us that specifies in detail the precise nature and grounds of such claim or dispute per Section 19.6 below.
W e will then have a period of 30 days following receipt of such notice within which to notify you as to whether we and/or our affiliates are exercising the right to mediate under this Section (the "Applicable Notice Period").
During the Applicable Notice Period, both parties will attempt to resolve the matter internally per Section 19.1 above.
You may and must not commence any action against us or our affiliates with respect to any claim or dispute in any court, unless and until: (i) we fail to exercise its option to submit such claim or dispute to mediation; or (ii) such mediation proceedings have been terminated either (a) as the result of a written declaration of the mediator(s) that further mediation efforts are not worthwhile, or (b) as a result of a written declaration by us.
Our option and right to mediate as set forth herein may be specifically enforced by us.
Each Party will bear its own cost of mediation, with you and us equally sharing the mediator fees.
This agreement to mediate will survive any termination or expiration of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the American Arbitration Association (AAA) plays a specific role in the mediation of disputes between Fitstop and its franchisees. Before commencing any legal action, if Fitstop elects to mediate, disputes will be submitted to mediation under the auspices of the AAA, following its Commercial Mediation Rules. This mediation is to take place at Fitstop's corporate headquarters.
Before involving the AAA, franchisees must first attempt to resolve disputes internally with Fitstop's management. If internal resolution fails, Fitstop has the option to submit the dispute to mediation. The franchisee must provide detailed written notice of the claim or dispute, and Fitstop has 30 days to decide whether to exercise its right to mediate. Franchisees cannot commence legal action unless Fitstop declines mediation or the mediation proceedings are terminated, either by the mediator or by Fitstop.
Both parties are responsible for their own mediation costs, but they will equally share the mediator's fees. This agreement to mediate survives the termination or expiration of the Franchise Agreement. However, mediation is not required for disputes involving violations of intellectual property rights, restrictive covenants, or the franchisee's payment obligations.
This mediation process, facilitated by the AAA, is a structured approach to conflict resolution, potentially offering a more cost-effective and less adversarial alternative to litigation. However, franchisees should be aware of the specific circumstances under which mediation is required or can be bypassed, as well as the cost-sharing arrangement for mediator fees.