Does the Fly Fitness arbitration provision remain in effect after the agreement expires or terminates?
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, the arbitration provision within the franchise agreement remains in full force and effect even after the agreement has expired or been terminated. This means that any disputes arising between Fly Fitness and the developer, even after the franchise relationship ends, will still be subject to resolution through arbitration.
This continuation of the arbitration provision is significant for prospective franchisees because it dictates the method of dispute resolution for an extended period. Franchisees should be aware that they may be required to engage in arbitration, rather than pursuing litigation in court, for any claims related to the franchise agreement, regardless of whether the agreement is still active. This can have implications for the cost, speed, and outcome of dispute resolution.
The FDD specifies that the arbitration will be conducted on an individual basis, preventing class-action lawsuits. It also stipulates that punitive or exemplary damages will not be awarded against either Fly Fitness or the developer. This further defines the scope and limitations of the arbitration process, which franchisees should carefully consider. Franchisees should seek legal counsel to fully understand the implications of these provisions and how they might affect their rights and obligations under the franchise agreement, both during and after its term.