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Disagreements between franchisors and franchisees are not uncommon. How they get resolved is often decided years earlier, when the franchise agreement was drafted. A franchise arbitration and mediation lawyer from Franchise.Law can help you build dispute resolution provisions that fit your system, catch problems before they turn into claims, and work toward a business resolution when a disagreement does arise.
For more than 15 years, our lawyers have advised franchisors across the United States on their franchise agreements, franchisee defaults, and the dispute resolution provisions that govern how conflicts with franchisees are handled.
Most franchise agreements spell out how disputes will be resolved. Many require mediation before either side can file a claim, and many require binding arbitration instead of a lawsuit in court. If the franchise agreement does not include an arbitration clause, disputes generally go to court unless both parties agree to arbitrate after the dispute arises. Knowing what your agreement requires, and what it leaves out, is the starting point for any dispute strategy.
Mediation is a voluntary, non-binding process that works well when the franchisor and franchisee want to preserve the relationship, or simply want to settle a disagreement without the expense of a formal proceeding. A neutral mediator works with each side, conveys offers back and forth, and may suggest ways to close the gap, but the mediator cannot impose a result. Nothing is final unless both parties sign a written settlement.
Arbitration is a private, binding alternative to litigation. A single arbitrator or a panel of arbitrators hears the evidence and issues an award under the rules the franchise agreement selects, which may be those of the American Arbitration Association, JAMS, or another provider. Courts will set aside an award only in narrow circumstances, and the prevailing party can ask a court to confirm and enforce it. Well-drafted franchise agreements usually carve out claims for injunctive relief, such as enforcing non-compete covenants or stopping unauthorized use of the franchisor’s trademarks, so the franchisor can go directly to court when it needs fast relief.
Franchisors that manage their franchising operations proactively are often aware of disputes before they need to be addressed with mediation or arbitration or, in extreme situations, litigation. An experienced arbitration and mediation lawyer, including any of the attorneys at Franchise.Law, could help your business to develop systems that flag potential issues at an early stage, including:
Whether you have a small number of franchisees or your operations extend to franchise locations throughout the country, you can easily miss these and other issues you can address directly without resorting to third-party dispute resolution.
Further, when you rely on Franchise.Law’s attorneys to prepare thorough and robust documents and agreements, including clear dispute resolution provisions, both you and your franchisees will better understand your respective rights and obligations, which leaves less room for ambiguities that can spark disputes.
When a disagreement does surface, a clear default notice, a negotiated amendment, or a mutual termination agreement will often resolve it faster and at far lower cost than any formal proceeding. We can help you choose the right approach and prepare the documents.
A franchise arbitration and mediation lawyer from Franchise.Law can help you get ahead of disagreements with your franchisees. We can help you prevent those disagreements before they start and manage negotiations to settle problems if they arise. Our forward-thinking approach can reduce the strain dispute resolution processes place on your time and resources and let you focus on the growth of your business.
Please call us for answers to your questions about arbitration and mediation, and for more information about how our franchisor-specific services can benefit your business.