In the event of a dispute with Kidokinetics, what is the franchisee initially required to do before involving a third party?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
| u. Dispute resolution by arbitration or mediation | Section 19.2 | You must first bring any claim that is between us to the attention of our management. You must first exhaust our internal dispute resolution procedures before you may bring your dispute before a third party. The requirement that you must first attempt to resolve disputes internally will survive the termination or expiration of your term. At our option, any disputes and claims that are not resolved by internal dispute resolution must, at our option, be submitted to mediation. The mediation will take place in Broward County, Florida before the American Arbitration Association ("AAA") in accordance with the AAA's Commercial Mediation Rules then in effect. You must notify us, with details of your claim or dispute, before commencing any legal action against us or our affiliates. Once we receive your notice, we will have 30 days to notify you as to whether we or our affiliates elect to exercise the option to submit the matter to mediation. You may not commence any action against us or our affiliates regarding any claim or dispute in any court unless we fail to exercise our option to submit the claim or dispute to mediation, or such mediation proceedings have been terminated under certain circumstances. This agreement to mediate will survive any termination or |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee must first bring any claim against Kidokinetics to the attention of Kidokinetics's management. The franchisee is required to exhaust Kidokinetics's internal dispute resolution procedures before involving a third party. This requirement to attempt internal resolution survives any termination or expiration of the franchise term.
If internal dispute resolution fails, Kidokinetics has the option to submit the dispute to mediation in Broward County, Florida, before the American Arbitration Association (AAA) under its Commercial Mediation Rules. The franchisee must notify Kidokinetics with details of the claim before starting any legal action. Kidokinetics then has 30 days to decide whether to submit the matter to mediation.
The franchisee cannot start a court action unless Kidokinetics does not choose mediation, or the mediation is terminated. The agreement to mediate survives any termination or expiration of the Franchise Agreement. This means that even after the franchise relationship ends, these dispute resolution steps still apply.
This clause highlights the importance of attempting to resolve issues directly with Kidokinetics before incurring the costs and time associated with third-party intervention. Franchisees should be prepared to engage in internal processes and potentially mediation as a first step in any dispute.