Set the Tone

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 have.

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.

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