How are the costs of mediation shared between the parties in a dispute regarding the Afuri Ramen Dumpling agreement?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
If a dispute arises between the parties, before taking any other legal action,
the parties agree to participate in at least six hours of mediation in accordance with the mediation procedures of Arbitration Service of Portland, Inc. or of any similar organization that specializes in the mediation of commercial business disputes. The party demanding mediation must provide written notice to the other party of the demand for mediation. If the other party does not respond to the mediation demand within 30 days of written notice, or indicates a refusal to participate in mediation, then the party providing notice may proceed with other forms of dispute resolution. The parties agree to equally share the costs of mediation. Injunctive relief and or claims of specific performance sought pursuant to or authorized by this Agreement, are not subject to, nor can be avoided by, the mediation terms of this Agreement, and may be brought in any court of competent jurisdiction.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, if a dispute arises between the franchisor and franchisee that leads to mediation, the costs of the mediation will be equally shared by both parties. This agreement to mediate applies before either party takes any other legal action. The mediation should follow the procedures of Arbitration Service of Portland, Inc., or a similar organization specializing in commercial business disputes.
Specifically, the party initiating the mediation must provide written notice to the other party. If the recipient of the notice does not respond within 30 days or refuses to participate, the initiating party is then free to pursue other legal avenues. However, the agreement to mediate does not prevent either party from seeking injunctive relief or specific performance in court if authorized by the Franchise Agreement.
This arrangement is fairly standard in franchising, as it encourages both parties to attempt to resolve disputes amicably and cost-effectively before resorting to more expensive and time-consuming litigation or arbitration. By sharing the costs equally, both Afuri Ramen Dumpling and the franchisee have a financial incentive to engage constructively in the mediation process and seek a mutually agreeable resolution.