What is the first step required before arbitration in the event of a disagreement between 1 800 Packouts and the franchisee?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
- ii. Before arbitration, each Party agrees to adhere to the following procedure:
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- First, in the event of a disagreement between us, we agree to meet face-to-face within 30 days after one Party gives written notice to the other;
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- Second, if the issues between us cannot be so resolved, then the disagreement must be submitted to non-binding mediation before the Judicial Arbitration and Mediation Service (JAMS) or its successor (or an organization designated by JAMS or its successor). If JAMS is unable or unwilling to conduct such proceedings, and the Parties to the dispute cannot agree on an appropriate organization or person to conduct such proceedings, mediation will be heard by the American Arbitration Association. (AAA).
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Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 1 800 Packouts Franchise Disclosure Document, before initiating arbitration, both 1 800 Packouts and the franchisee must first attempt to resolve their disagreement through a face-to-face meeting. This meeting must occur within 30 days after one party provides written notice of the disagreement to the other party.
This initial step is designed to encourage direct communication and negotiation between the parties involved, with the hope of resolving the issue informally before escalating to more formal and costly dispute resolution methods like mediation or arbitration. By mandating a face-to-face meeting, 1 800 Packouts aims to foster a collaborative approach to problem-solving and maintain a positive working relationship with its franchisees.
If the face-to-face meeting does not resolve the issues, the next step is to submit the disagreement to non-binding mediation before JAMS (Judicial Arbitration and Mediation Service) or its successor. If JAMS is unable to conduct the proceedings, the American Arbitration Association (AAA) will be used. This structured approach to dispute resolution, starting with a meeting and then mediation, is a common practice in franchising to provide franchisees and franchisors an opportunity to resolve conflicts efficiently.