Mediation and Franchising, A Necessary Tool

As a franchise attorney, prior to my training in dispute resolution, I didn't consider using mediation as an initial or primary resolution tool. I typically found the background necessary in franchising was lacking on the part of the mediator, which watered down their credibility and ability to discuss the nuances associated with the realities franchise professionals live day in and day out. The importance of the settlement came first, but the continued relationship of the parties was somewhat ignored, to the detriment of the ongoing relationship.

The franchise relationship has been likened to courtship in many articles, and rightfully so. The initial offer and sale, is like dating, getting to know all about the system and parties to the franchise opportunity. The franchise agreement is the start of the marriage, and the terms the guiding principles of the relationship. The end can be a natural expiration, or an early termination or divorce. Needless to say, disputes will arise between franchisees and franchisors, but the obligation to get past the conflict and back to business will always persist.

The long-term success of franchisors and franchisees is dependent upon a true symbiotic relationship. Many other forms of commercial ventures are transient, with parties being interchangeable and only responsible for their own actions. When a dispute arose, parties could easily move on. These transient relationships foster no sense of community or system, and in fact their actions inversely impact those similar businesses. Competitors may see success through the failure of another, and a negative impact on their operation when a competitor succeeds.

Franchising is markedly different; the success of an individual franchisee has a positive impact on fellow franchisees, and conversely, a negative impact when a franchisee fails or is in a heated dispute with their franchisor. This tethering to the system is why the resolution of conflict and relationship issues are critical for a franchise system to thrive. The franchisor and franchisee must survive the dispute, and the systems perception of how the parties navigated the dispute must strengthen their belief and commitment in a synergistic partnership.

A more proactive attempt at dispute resolution is important in maintaining the franchisor franchisee operational focus, including a resolution that protects the relationship and fosters the inherent dependency on each other and the system. My mediations allow the parties to air and resolve grievances in a controlled non-confrontational environment, guided by an experienced franchise mediation specialist. With my vast and varied experience in franchising, I am able to connect with the franchisor and franchisee and utilize my experience to assist the parties in crafting solutions not on their immediate radar. A successful resolution entails guiding the participants in reconciling their differences and relationship, to insure all the parties are poised for future success.

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