In DNB Fitness, LLC v. Anytime Fitness, LLC , 2012 U.S. Dist. LEXIS 74287 (N.D. III. May 30, 2012), a federal district court only partly granted a franchisor’s motion to dismiss, as the court refused to enforce a clause that required mediation before the filing of a lawsuit. The case was a challenge to Anytime Fitness’ practice of charging franchisees when they enrolled their health club members in a website called “Anytime Health.” Several franchisees sued Anytime for breach of contract and alleged a failure of appropriate disclosure. The plaintiffs also alleged that Anytime used its leverage as franchisor to enhance sales in the fitness website market in violation of antitrust law. Anytime moved to dismiss, arguing that the franchise agreements first required mediation. The mediation clause, however, provided an exception for parties seeking equitable relief “to preserve the goodwill of its business.” The court concluded that this exception applied.
The court did dismiss certain plaintiffs from the suit based on releases contained in prior franchise transfer agreements. The court determined that the contract claims arose when Anytime allegedly failed to disclose the fee policy, which occurred before the transfer agreements were executed. Therefore, those plaintiffs who had later signed releases had waived their right to bring those claims. The court also granted Anytime’s motion to transfer venue to Minnesota pursuant to a forum selection clause in the franchise agreements.