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Keys for Successfully Mediating Franchise Disputes

By Charles S. Modell
October 02, 2015

Many franchise agreements now require the franchisor and franchisee to meet face-to-face, with an independent mediator, before any adversary proceeding is initiated between them. Even without such a provision, many practitioners advocate mediation as a means of settling franchisor-franchisee disputes.

Mediation offers many advantages to both parties, not the least of which is the opportunity to avoid hundreds of thousands of dollars in legal fees incurred in a lawsuit. Even for those who can afford the cost of a legal battle, mediation allows resolution of their own differences, rather than having someone who knows nothing about their business, i.e., a judge, jury or arbitrator, decide for them.

As one who has represented franchisors in mediation, but also served as a mediator, I have seen first-hand the benefits of mediation. However, I have also seen situations in which one or both parties expect that it is a magic pill that will result in getting everything they wanted; after all, they are right and now the mediator will force the other side to do the right thing too! Unfortunately, successful mediations do not just happen; they take work, preparation, the right attitude, and often, the right mediator. This article discusses the elements of a successful franchise mediation from the perspective of one who has been a participant in dozens of mediations.

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