Important Things to Know about Franchise Mediation?

By on November 12, 2021

In many cases, franchise agreements include the provision for the parties to use mandatory mediation. The process of mediation is intended to provide a neutral venue for the parties to try and resolve their differences without taking the dispute to court and incurring attorneys’ fees.

What can franchisors and franchisees expect from mediation?

1. A Resolution is Not Guaranteed

As opposed to litigation and arbitration, there is no certainty that mediation will result in a resolution. If the parties cannot come to an agreement, they will have to pursue other remedies. This may involve entering arbitration or going to court with a lawsuit.

2. Good Faith from Both Parties is Required for Success

During mediation, both parties must participate in good faith if an agreeable result is to be had. This means each party must be willing to recognize the evidence at hand and consider reasonable options to resolve the dispute.

3. There are Costs with Attending Mediation

Franchise agreements with mediation provisions often require the mediation take place in the city in which the franchisor is headquartered. Also, the parties typically share the expenses of the mediator and the venue. The potential cost and likelihood of obtaining an early resolution are factors that franchisors and franchisees alike must weigh when deciding whether to pursue mediation.

4. You Don’t Have to Settle Until You Are Satisfied with the Results

No matter the offer made during mediation, neither side is required to accept the proposal. If you think the settlement is not fair, you can deny the offer and seek a better result in arbitration or in court.

5. An Experienced Franchise Lawyer Will Make a Big Difference

Regardless of the challenges of mediation, an experienced franchise attorney can help you effectively present your side of the dispute and ensure the other side engages in good faith. An attorney can also help you determine the benefits and any drawbacks of accepting a proposed resolution. Because of the context of a franchise relationship, having an experienced franchise attorney to guide you is critical.

For much less cost than entering litigation, a franchisor and franchisee can utilize an attorney who understands the franchise agreement, has a hold on the relevant facts, and can provide solid legal guidance.

For information about the representation, we offer for franchising mediation or to schedule a consultation, call us today at 949.252.9377 or send us a message through our contact form.

MULCAHY LLP

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