Franchise laws vary from State to State, some such as California offer
precise and clear protections, and others relegate it to FTC disclosure
guidelines. One thing is clear, disputes will arise, and for the most
part franchise laws don't address or mandate their resolution, past
litigation through private rights of action. Franchisors and Franchisees
have competing interests on the mechanics of how to resolve disputes,
which can be seen in the varied iterations of dispute resolution provisions
housed in franchise agreements. Some detail no dispute resolution, others
have a specific guideline; "negotiate, if that fails within 30 days
mediate, if that fails within 60 days arbitrate……"
it seems to be an exhausting process, which requires the dedication of
resources and time, things most franchisees in distress or dispute just
Don't get me wrong, I am all for provisions that lay out a path to
address concerns, but those paths should take into account the relative
ability of those parties to take advantage of those procedures, to foster
the best chance of resolution. I understand that it is a wonderful deterrent
for a franchisor to require mediations and arbitrations to take place
in a venue close to the franchisor's base; but does that achieve the
real purpose of getting to and resolving the issues at hand, or does it
exacerbate and escalate the angst and conflict, and even worse commit
the franchisee to a more hardened path, since they have to dedicate resources
and time to take the fight to you.
I have had some success in negotiating an accommodation for meditation
locations, but less so for arbitrations, and this is understandable, since
the elevation to arbitration typically indicates the relationship is broken
and no one is considering reconciliation, so why accommodate. The reality
is a negotiated resolution tends to address the parties interests much
more directly and accurately, then leaving the ruling to a third party,
so a bit of accommodation may be well resulting resolution.
As a mediator and negotiator it makes sense to set the tone from the start.
If you are interested in resolution, accommodation on both sides begins
the process of resolution. Process negotiation (where and when a mediation
will take place) sets the tone for how the substantive issues will be
addressed. Take the time to consider how to achieve the best resolution
and see if a bit of process accommodation may not start the entire endeavor
out on the right foot.
I wish all of you a Prosperous and Happy New Year. If I can be of any assistance
in the resolution of your matters, please feel free to contact me.