Does the Fly To Fit agreement allow for class action lawsuits or arbitrations?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.3 Waiver of Class Actions. The parties agree that any claims will be arbitrated, litigated, or otherwise resolved on an individual basis, and waive any right to act on a class-wide basis.
ARTICLE 17. DISPUTE RESOLUTION
17.1 Arbitration.
- (a) Disputes Subject to Arbitration. Except as expressly provided in subsection (c) and (d), any controversy or claim between the parties (including any controversy or claim arising out of or relating to this Agreement or its formation and including any question of arbitrability) shall be resolved by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, including the Optional Rules for Emergency Measures of Protection. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction.
- (b) Location. The place of arbitration shall be the city and state where Fly To Fit Franchise's headquarters are located.
- 17.6 Legal Costs. In any legal proceeding (including arbitration) related to this Agreement or any guaranty, the non-prevailing party shall pay the prevailing party's attorney fees, costs and other expenses of the legal proceeding. "Prevailing party" means the party, if any, which prevailed upon the central litigated issues and obtained substantial relief.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, the franchise agreement includes stipulations regarding dispute resolution. Specifically, it mandates that any claims be addressed on an individual basis, explicitly waiving the right to participate in class-wide actions. This means a franchisee cannot be part of a class action lawsuit against Fly To Fit.
Furthermore, the agreement dictates that controversies or claims between the parties, including those related to the agreement itself, must be resolved through arbitration administered by the American Arbitration Association, following its Commercial Arbitration Rules. The location for arbitration will be the city and state where Fly To Fit's headquarters is located. This arbitration clause does not apply to claims involving the infringement of Fly To Fit's intellectual property rights, which can be brought in a court authorized to hear such claims.
These provisions are fairly standard in franchise agreements. By agreeing to these terms, a Fly To Fit franchisee gives up the right to join a class action against the franchisor and agrees to resolve most disputes through arbitration, which is generally considered a faster and less expensive alternative to litigation. However, it also means the franchisee will bear the costs of legal proceedings if they do not prevail, as the agreement states that the non-prevailing party shall pay the prevailing party's attorney fees and costs.