What is specific franchise mediation and when is mediation an option?

It occurs in the best marriages and also in franchise relationships: a difference of opinion arises. The parties will discuss this difference of opinion and try to convince each other that they are right. It is of course to be hoped that after a good conversation you have been able to clear the air again.

If that does not work, another conversation may follow, perhaps letters will follow back and forth and a conflict threatens to arise. Franchisor and franchisee would like to continue working together, but the difference of opinion threatens to disrupt a previously good relationship.

To resolve a difference of opinion that can perhaps even be called a conflict, mediation could be considered. Mediation is a form of dispute resolution in which the franchisor and franchisee sit down together with a mediator. The mediator is independent. During the mediation, both parties will give their own vision of the case and during the conversation the effort is to reach a settlement. The mediator can take a leading role in this by guiding the conversation in the right direction, he can advise on the (legal) feasibility of possible solutions. Unlike submitting a case to a judge or an arbitrator, there is no final judgment. Parties can come to an arrangement with the help of a mediator, which is then laid down in writing by the mediator.

The advantage of mediation is that the matter can still be resolved in good consultation, which is always preferable, but certainly when both franchisor and franchisee want to continue working together. A mediator can break through an impasse that has arisen during earlier conversations. The risk of such impasses is that additional irritations arise that only seem to make the problems worse.

A condition for giving mediation a chance of success is that the parties must be prepared to reach a solution to a dispute. With a business-like approach, you would expect both franchisor and franchisee, if there is a problem, to want to fix it. Sometimes, however, it turns out that a discussion has become so principled or that the ideas about what could be regarded as a solution to the dispute are so far apart that the parties will not agree on this, then it is necessary to ask the opinion of a third party, which will then likely to be a judge or arbitrator, depending on whether the parties have agreed to do so.

If mediation is an option, it is advisable to approach a good franchise mediator. This can be an NFV mediator or another specific franchise mediator. These mediators are explicitly trained and equipped to supervise a mediation procedure between franchisor and franchisee.

Ludwig & Van Dam franchise attorneys, franchise legal advice