The Main Process Involved In Franchise Dispute Resolution

Posted by franchise-law on January 15th, 2018

If your franchise business is facing too many problems, to resolve the dispute, every franchise document usually has clauses that say how franchise dispute must be handled. In addition to the definition of your obligations and rights, Franchising Code of Conduct (the Code) also sets out the steps you should take in case of franchise dispute. The primary dispute resolution mode under the Code is Mediation. It applies to conduct since January 2015. If your franchise agreement is signed before this date, a different mode of dispute resolution is applied to your dispute case.

In case of a franchise dispute, you can refer your franchise agreement to settle the dispute or as set out in Code Procedure. If you choose any of the franchise dispute resolution procedures from Internal and Code Procedure, you also have the right to take the help of lawsuit to settle the franchise dispute.

Internal Procedure of dispute resolution is as follows:

You have to go through these basic steps if you go for this procedure for franchise dispute resolution:

1. Inform the Other Party about the Issue

In this step, you need to send a dispute notice to the other party. This notice will tell to the other party what the real dispute is all about. Moreover, the notice will also tell what mode of resolution you prefer and what steps you think another party will take for the dispute settlement.

2. Work On To Reach On a Common Resolution Medium

If you and other party haven’t reached on a common resolution medium, both of you have the right to request the franchise mediation. Even if you can’t, a mediator is appointed to you under the Code.

3. Attend Mediation

To resolve the dispute, it is mandatory for both parties to attend the mediation in person.

Following the Code Procedure

In this process, you need to go through three steps which are nearly the same that of the Internal Procedure, but there is a slight difference in mediation stage.

1. Inform the Other Party of the Dispute

Like Internal Procedure, this step also sends a dispute notice to the other side with your preferred international dispute resolution medium, your preferred outcome, and your opposite party’s dispute resolution medium.

2. Work On To Reach On a Common Resolution Medium

Like Internal Procedure, if you fail to decide a common resolution medium, one mediator appointed to you under the Code.

3. Attend Mediation

Like above, here also both parties have to attend the mediation to reach a resolution. In case of non-attendance, a fine is applied. Both parties have to bear the mediation costs. Mediator has the right to end the mediation if it has been going on for more than 30 days or on the request of either party.