What is the Best Procedure to Resolve a Franchise Dispute?

Franchise law is notoriously complicated. If you find yourself embroiled in a franchise dispute, there are ways to resolve the matter without resorting to legal action. Follow these steps to attempt to resolve your franchise dispute in the most speedy and equitable manner possible.

Review the Franchise Agreement

Carefully read the franchise agreement to understand the terms, obligations, and dispute resolution mechanisms stipulated. Look for specific clauses related to dispute resolution, such as mediation, arbitration, or litigation.

Have an Open Dialogue and Attempt to Resolve the Matter Internally

Before you pursue any third-party mediation that could complicate the matter, start a conversation between the franchisor and franchisee to see if you can work things out. Aim for a cooperative and constructive dialogue. Make sure that you document in writing the specific points of contention and any communications exchanged.

Mediation

If you are unable to resolve the matter through direct discussions, engage a neutral third-party mediator. Mediation is a non-binding process, and the presence and advice of a third party may help you to resolve gridlock and reach a fair agreement.

Arbitration

The next step up from mediation is arbitration. Unlike mediation, which is non-binding, the decision of an arbitrator is usually final and enforceable. Make sure you review the franchise agreement to see if it specifies arbitration.

Litigation

Consider litigation only as a last resort. However, if all the above steps fail, and arbitration is not stipulated, it may be time to file a lawsuit in the appropriate court and engage legal counsel experienced in franchise law.

With 30 years of experience as a Los Angeles business attorney, Peter Bronstein is your top choice for franchise litigation. He’ll give you expert legal advice and work with you to resolve your franchise dispute. Contact Peter Bronstein today for a franchise law consultation.