Franchise disputes arise when either the franchisor or the franchisee fails to live up to their obligations outlined in their franchise agreement. If one or more of your franchisees have violated their contracts with you, dedicated franchise attorneys could help resolve your conflicts through mediation. Mediation may allow the conflict to be resolved quicker and cheaper than in court. Even if mediation is not required under your franchise agreements, this may still be a viable option if both parties voluntarily agree to it. Before jumping to litigation, meet with a North Carolina franchise dispute mediation lawyer to determine if any alternative conflict resolution strategies could work for your franchise.
Most franchise disputes arise from miscommunication, misunderstanding, or some other easily avoidable circumstance. A franchisee’s intentional violation of the franchise agreement is rare as it could harm their relationship with the franchisor and potentially hamper future business. Usually, disputes occur when franchisees are affected by external factors leading them to believe they must do something that constitutes a violation of the agreement.
For instance, if a franchisee operates a restaurant and their agreement dictates they must be open seven days a week but they decide to close on Monday afternoons because that time of the week is not profitable, they are in breach of their franchise agreement. Franchisors will often show leniency and negotiate with their first few franchisees as they want to grow their franchise system, but as the network expands, fines, penalties, and litigation may result. A North Carolina franchise dispute mediation lawyer could help franchisors protect their business and rights during mediation or take the issues to court if the negotiations fail.
Mediation is really a negotiation process where both the franchisor and franchisee will sit down and try to come to an agreement with a mediator. Mediators are usually retired judges or attorneys, and often have a background in business or contract law. The mediator will hear testimony and arguments from both parties. Then, the parties split up and the mediator will go back and forth between them for as long as it takes to find neutral ground and a settlement. Usually, mediation is non-binding, so if it does not work out and the parties cannot reach an agreement, either party will be free to move on and escalate the dispute to litigation in court. However, if the parties sign a written settlement agreement at mediation, they are bound by those terms.
Mediation can be very beneficial. Often, the most important advantage to mediation is that it can significantly reduce legal costs. However, when heading into a franchise dispute, a mediation lawyer should be consulted with, even if that case will not go to court. An attorney with experience handling mediation could help guide franchisors through the negotiation process to ensure that their goals are met during the mediation to avoid having to revisit the issue or escalate the dispute.
For many franchisors in North Carolina, a franchise dispute mediation lawyer can be a useful ally. Our experienced attorneys can leverage their legal and entrepreneurial experience to negotiate for you during mediation. When hiring an attorney for mediation, it is important to work with someone who can get creative with solutions. While mediation can offer a lot more flexibility than litigation or even arbitration, heading into negotiations without your goals clearly planned and without a franchise lawyer who knows how to best pursue those strategic goals could simply make the problem worse. If you are looking to use mediation to resolve a dispute with your franchisee, call our franchise dispute lawyers today to schedule a consultation on your case.
By: Jim H.
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