Does the Fly Fitness agreement allow for class-wide or multiple plaintiffs in arbitration?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 10.3.3 This arbitration provision is self-executing and will remain in full force and effect after expiration or termination of this Agreement. Any arbitration will be conducted on an individual, and not a class-wide or multiple plaintiffs, basis. If either party fails to appear at any properly noticed arbitration proceeding, an award may be entered against the party by default or otherwise, notwithstanding the failure to appear. Judgment upon an arbitration award may be entered in any court having jurisdiction and will be binding, final and not subject to appeal. No punitive or exemplary damages will be awarded against Franchisor, Developer, or entities related to either of them, in an arbitration proceeding or otherwise, and are hereby waived.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, any arbitration will be conducted on an individual basis, explicitly prohibiting class-wide or multiple plaintiffs. This means that a franchisee cannot join with other franchisees to bring a single arbitration case against Fly Fitness.
This requirement for individual arbitration has significant implications for prospective Fly Fitness franchisees. It means that each franchisee must pursue their disputes independently, bearing the full cost and effort of arbitration. This can be a disadvantage, especially if multiple franchisees have similar grievances, as it prevents them from pooling resources and presenting a unified case.
The FDD also specifies that the arbitration provision is self-executing and remains in effect even after the agreement expires or terminates. The arbitration will be conducted using the Commercial Arbitration Rules of the American Arbitration Association, with proceedings taking place in Nebraska or, at Fly Fitness's discretion, in the county where the franchisee's principal place of business is located. This clause ensures that disputes are resolved through arbitration, offering a potentially faster and more cost-effective alternative to litigation, but always on an individual basis.