A New York appellate court recently ruled on a significant franchise dispute between Westchester Fitness, LLC, and Retrofitness, LLC. The court's decision affects the ongoing legal battle over contract breaches and the appropriate jurisdiction for resolving these issues.
The case, Westchester Fitness, LLC v. Retrofitness, LLC, was filed under docket number 2021-05695 and decided on May 6, 2026, by the Appellate Division of the Supreme Court of the State of New York. The ruling modifies an earlier decision that dismissed several claims made by Westchester Fitness against Retrofitness.
Background
Westchester Fitness, LLC entered into a franchise agreement with Retrofitness, LLC in 2009. This agreement allowed Westchester Fitness to establish and operate a Retrofitness franchise outlet. A key aspect of the franchise agreement was a forum selection clause, which stated that any legal disputes would be handled in New Jersey courts.
The franchise agreement expired in September 2019. Following its expiration, Retrofitness filed a lawsuit in New Jersey against Westchester Fitness and its representative, Holly Wallman, claiming breach of contract. In response, Westchester Fitness initiated its own lawsuit in New York in January 2020, alleging that Retrofitness had violated the terms of the franchise agreement.
As the legal proceedings unfolded, Retrofitness sought to move the New York case to federal court. However, the U.S. District Court for the Eastern District of New York determined it did not have jurisdiction and sent the case back to the New York state court. Westchester Fitness later amended its complaint to include additional plaintiffs and claims.
The Ruling
The court ruled on the appeal from Westchester Fitness regarding the dismissal of certain claims against Retrofitness. The justices, including Francesca E. Connolly, Cheryl E. Chambers, Helen Voutsinas, and Elena Goldberg Velazquez, modified the earlier ruling. They removed the dismissal of the seventh, eighth, ninth, tenth, and eleventh causes of action against Retrofitness.
The court stated, "the forum selection clause does not apply" to these specific claims, meaning they can proceed in New York. The judges emphasized that the forum selection clause in the franchise agreement only applies to claims arising from the franchise relationship.
Furthermore, the court highlighted that the plaintiffs did not provide sufficient evidence to show that the forum selection clause was unreasonable or unjust. They noted, "the applicability of a forum selection clause does not depend on the nature of the underlying action," reinforcing that such clauses are generally enforceable unless proven otherwise.
Impact
This ruling has significant implications for both parties involved. For Westchester Fitness, it allows them to pursue specific claims in New York, potentially leading to a more favorable outcome than if they had to litigate in New Jersey. The decision also clarifies how forum selection clauses operate in franchise agreements, reinforcing their enforceability while allowing for exceptions based on the nature of the claims.
The ruling may set a precedent for future franchise disputes, particularly regarding how courts interpret and enforce forum selection clauses. It underscores the importance of understanding the implications of such clauses when entering into franchise agreements.
What's Next
Westchester Fitness can now proceed with the claims that were reinstated by the court. It remains to be seen whether Retrofitness will seek to appeal the decision or if there are related cases pending that could affect this dispute.