The franchisor-franchisee relationship is complex and involves many elements. Obligations for both sides are set in a written Franchise Agreement, and are subject to federal and state laws. Many franchise relationships work well.
But in any kind of relationship, sometimes one side or another may become disappointed. In some instances lawsuits occur. Sometimes lawsuits are needed. Often, disputes can be solved without litigation.
If you as franchisor or franchisee feel you may have a legal claim, you don’t necessarily need to get into a long, expensive litigation process. Franchise disputes, like all other claims, can often benefit from level-headed communication, reasoned negotiation, and when appropriate, Alternative Dispute Resolution (ADR).
Several, effective ADR methods are available, each involving a neutral third party to work with the parties and legal counsel, seeking to resolve the claim or dispute.
Dispute Resolution by Arbitration
In Arbitration, a third party Arbitrator hears your claim. The Arbitrator’s decision is generally considered final and binding. The Arbitrator acts in a similar manner to a judge – listening to both sides, evaluating evidence, making a decision that seeks to achieve fairness, and often providing a written explanation. Arbitration is generally much more informal compared to going to court.
Dispute Resolution by Mediation
Mediation involves the use of a neutral, third party Mediator. The Mediator meets with the parties and their lawyers, serving as a facilitator for discussion and negotiation to resolve the dispute. With a Mediator, no decision or ruling is imposed on anyone; and no one is forced to accept any particular outcome. A Mediator seeks to help the parties reach their own mutually acceptable solution.
ADR a Smart Choice
Most parties in a dispute feel they can save time and money by using Arbitration or Mediation. Moreover, courtrooms nationwide, and especially in California and Los Angeles, are becoming more back-logged with litigation. Arbitrations and mediations can be set to occur sooner, and can be scheduled according to the parties’ convenience. This can mean an earlier resolution than waiting for a hearing in a backlogged court.
If you have questions about avoiding or resolving a dispute, or need help with a business litigation matter, contact our Business Litigation Attorneys for a consultation.