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Best Practices for Handling Franchise Disputes with Mediation

Monday, December, 17, 2012


Franchise mediation has proven to be overwhelmingly more successful in resolving franchise disputes than litigation.  Think about it: in mediation, the dispute is resolved through simple, honest and effective communication between the franchisee and the franchisor; in litigation, the dispute is settled by a judge who likely spends a large portion of his or her time dealing with criminal matters.  How important do you think a civil matter will be to him or her? 

Beyond the confidentiality that franchise mediation offers—something that the court system does not—the process of settling franchise disputes via mediation is less costly AND less time consuming, as well.  In an industry where even a little time off work can be a significant loss to the franchise, and where any negative brand image at all can cost the franchise its reputation and customers, franchise mediation just makes more sense. 

In franchise mediation, both the franchisor and franchisee sit down and clearly state their position, offering any supporting evidence, to a neutral third party mediator.  This mediator is not only trained in franchise law and procedures, understanding the unique and dynamic relationship that occurs between a franchisor and franchisee—he or she is also trained in effective tactics to help people resolve disputes so they can get back to business as usual. 

Just because mediation is chosen as a method to resolve the franchise-related dispute doesn’t mean that you are unable to have legal representation present to ascertain that your rights are upheld to the fullest extent of the law.  Also, any guarantor of the obligations of the franchisee or spouses involved in the franchise operations can also be present so that all stakeholders can have equal opportunity to be involved in the resolution of the dispute.