What is the status of the Focalpoint Coaching franchise agreement during an arbitration proceeding regarding the franchisee's right to terminate?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
I also expressly acknowledge my possession of skills and abilities of a general nature, and the opportunity for exploiting such skills in other ways than the operation or involvement in the activities of a FocalPoint Franchised Business or a Competitive Business, so that enforcement of my covenants made in this Agreement will not deprive me of my personal goodwill or ability to earn a living after the effective date of expiration or termination of my relationship with Franchisee, the Business, or FocalPoint Franchised Businesses generally. If I fail or refuse to abide by any of my foregoing obligations or promises made under this Agreement, and Company or Franchisee obtains enforcement in a judicial or arbitration proceeding, then my obligations and responsibilities specified under the breached covenant will be tolled during the period(s) of time that the covenant is breached and/or Company or Franchisee seeks to enforce it, and will continue for two (2) years starting from the effective date of the order enforcing the covenant.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, if a franchisee fails to abide by their obligations and Focalpoint Coaching or the franchisee seeks enforcement in an arbitration proceeding, the franchisee's responsibilities under the breached covenant will be suspended during the period of the breach and enforcement. These obligations will then continue for two years from the date of the order enforcing the covenant.
This means that during an arbitration proceeding concerning a franchisee's right to terminate, the terms of the franchise agreement remain in effect. The franchisee must continue to meet their obligations unless the specific covenant in question is tolled (suspended) due to the arbitration. If the arbitrator rules in favor of Focalpoint Coaching, the franchisee will be subject to the original terms for an additional two years after the order is issued.
This clause ensures that Focalpoint Coaching's interests are protected even during legal disputes. The franchisee cannot simply disregard their contractual duties while challenging the agreement. The tolling provision extends the period of obligation, providing further security for Focalpoint Coaching. Prospective franchisees should carefully consider the implications of this clause, particularly regarding non-compete and confidentiality obligations, as these could significantly impact their future business activities if a dispute arises.