Must arbitration for Fly Fitness be conducted on an individual basis?

According to Fly Fitness's 2024 Franchise Disclosure Document, any arbitration between Fly Fitness and a developer (franchisee) must be conducted on an individual basis, explicitly excluding class-wide or multiple plaintiffs. This means that each franchisee must pursue any claims against Fly Fitness separately.

This requirement has significant implications for prospective franchisees. It prevents franchisees from joining together to pursue a single arbitration case against Fly Fitness, even if they have similar or identical claims. This can increase the cost and complexity of resolving disputes, as each franchisee must bear the full burden of their legal expenses. It also potentially reduces the bargaining power of individual franchisees, as Fly Fitness may have more resources and experience in arbitration.

The FDD specifies that if either party fails to appear at a properly noticed arbitration proceeding, an award may be entered against the defaulting party. Furthermore, the document states that no punitive or exemplary damages will be awarded against Fly Fitness or the developer in any arbitration proceeding. The judgment upon an arbitration award will be binding, final, and not subject to appeal.

This clause is self-executing and remains in effect even after the franchise agreement expires or is terminated. The FDD also specifies that the Federal Arbitration Act governs all issues relating to arbitrability or the enforcement of the arbitration agreement. All hearings and other proceedings will occur in Nebraska, at the American Arbitration Association, or, if Fly Fitness chooses, in the county where the developer's principal place of business is located.