What organization will disputes be submitted to for arbitration for Fly Fitness?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 10.3.1 Except disputes not subject to alternative dispute resolution as set forth in Section 10.4, any dispute between Franchisor and Developer arising out of or relating to this Agreement, the Attachments hereto or any breach thereof, including any claim that this Agreement or any of its parts, is invalid, illegal or otherwise voidable or void, which has not been resolved in accordance with Sections 10.1 or 10.2, will be resolved by submission to the American Arbitration Association or its successor organization to be settled by a single arbitrator in accordance with the Commercial Arbitration Rules then in effect for such Association or successor organization.
- 10.3.2 All issues relating to arbitrability or the enforcement of the agreement to arbitrate contained in this Article 10 will be governed by the Federal Arbitration Act (9 U.S.C. §1 et seq.) and the federal common law of arbitration. All hearings and other proceedings will take place in the State of Nebraska, or the offices of the American Arbitration Association, or, if Franchisor so elects, in the county where the principal place of business of Developer is then located.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, disputes arising from the Development Agreement that are not resolved through internal dispute resolution or mediation will be submitted to the American Arbitration Association (AAA) or its successor organization for arbitration. The arbitration will be settled by a single arbitrator, following the Commercial Arbitration Rules in effect for the AAA or its successor.
This means that if a Fly Fitness franchisee has a disagreement with the franchisor that cannot be resolved informally or through mediation, the dispute will be decided by a neutral arbitrator rather than through a lawsuit in court. The location for hearings and other proceedings will be in the State of Nebraska, or at the American Arbitration Association offices, unless Fly Fitness elects to hold them in the county where the franchisee's principal place of business is located.
It's important to note that certain types of claims are excluded from this arbitration requirement, including Fly Fitness's claims for injunctive relief, disputes arising from antitrust laws, disputes related to the ownership or validity of the Fly Fitness trademarks, and enforcement of the franchisee's post-termination obligations, such as non-competition covenants. Franchisees should be aware of these exceptions and consult with legal counsel to understand their rights and obligations regarding dispute resolution under the Development Agreement.