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When Franchisee and Franchisor Disagree

Sunday, November, 25, 2012


As the world of small businesses grows, the opportunity for franchising has opened doors for many entrepreneurs to achieve their business goals and run their own business.  However, in the process, there is the potential for many disputes to arise when the franchisee and franchisor disagree with how things should be done or how the business should operate.  When complaints regarding branding, marketing or compliance issues arise, these can become issues that are able to make or break the business opportunity for both parties involved.    

The truth is that disagreements will happen and can be caused by multiple circumstances that may or may not be out of the franchisor’s hands.  However, when these disagreements do occur, the best way to solve them is through professional, expert-led communication by someone who has industry experience and is familiar with laws relating to running a franchise.  In most cases, neither side involved in the dispute wants to spend valuable time and money in litigating the case.  This is why franchise mediation is the newest, best way to handle franchise disputes that might arise between parties involved in franchise operations. 

Franchise mediation is a form of Alternative Dispute Resolution (ADR) in which a neutral, third-party mediator works with both parties involved in a dispute and allows them the opportunity to state their “side” while providing supporting evidence.  In the mediation process, each party involved in the conflict has equal time to share his or her concerns, helping to clear the air and avoid confusion that often turns small conflicts into massive ones. 

Some of the most common franchise disputes that can be handled through mediation include general negligence, operations and training neglect, marketing neglect, royalty disputes, lost income and lost profit claims, IP and competition claims, partnership disputes, investor disputes, mismanagement or neglect, facility matters, equipment matters, creditor analysis, payment disputes, wrongful terminations, harassments, discrimination, accidents and injuries, alcohol liability issues, contaminations, food and beverage illnesses, safety and security issues, ADA compliance issues, and IP and branding issues.