Does the All County mediation requirement apply to disputes involving a loan or other finance arrangement between All County or its affiliates and the franchisee?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
25.12. DISPUTE RESOLUTION.
- 25.12.1. Mediation. Except as provided in Article 25.12.3., prior to filing any demand for arbitration, the parties agree to mediate any dispute, controversy or claim between the parties and any of our or your affiliates, officers, directors, shareholders, members, guarantors, employees or owners arising under, out of, in connection with or in relation to this Agreement, any lease or sublease for your Business, any loan or other finance arrangement between us or our affiliates and you, the parties' relationship, your Business, or any Methods of Operation, Operating System or Operating Standard, in accordance with the following procedures:
- 25.12.1.1. The party seeking mediation must commence mediation by sending the other party, in accordance with Article 26, a written notice of its request for mediation headed "Notification of Dispute". The Notification of Dispute will specify, to the fullest extent possible, the party's version of the facts surrounding the dispute, the amount of damages and the nature of any injunctive or other relief such party claims. The party (or parties as the case may be) receiving a Notification of Dispute will respond within
twenty (20) days after receipt thereof, in accordance with Article 26, stating its version of the facts, and, if applicable, its position as to damages sought by the party initiating the dispute procedure; provided, however, that if the dispute has been the subject of a default notice given under Article 22 of this Agreement, the other party will respond within ten (10) business days.
- 25.12.1.2.
Upon receipt of a Notification of Dispute and response under Article 25.12.1., the parties will endeavor, in good faith, to resolve the dispute outlined in the Notification of Dispute and response.
If the parties have been unable to resolve a dispute outlined in a Notification of Dispute or a response thereto within twenty (20) days after receipt of the response, either party may initiate a mediation procedure in accordance with the American Arbitration Association ("AAA"), pursuant to its Commercial Mediation Procedures, and unless otherwise agreed by the parties will take place in the city of our then-current corporate headquarters.
The parties must select a mediator jointly.
- 25.12.1.3.
All mediation sessions will occur in Florida at a mutually agreed location and must be attended by your Principal Owners or Managing Owner (and any other persons with authority to settle the dispute on your behalf) and our representatives(s) who is/are authorized to settle the dispute.
The parties may be represented by counsel at the mediation.
The parties agree to participate in the mediation proceedings in good faith and with the intention of resolving the dispute if at all possible within thirty (30) days of the notice from the party seeking to initiate the mediation procedures.
If the dispute is not resolved within thirty (30) days, the parties are free to pursue arbitration.
In addition, if the party receiving notice of mediation has not responded within five (5) days of delivery of the notice or a party fails to participate in the mediation, this Article 25.12.1. will no longer be applicable and the other party can pursue arbitration.
The parties agree that the costs of the mediator will be split equally between the parties.
Each party must pay its own fees and expenses incurred in connection with the mediation.
The mediation proceeding and any negotiations and results thereof will be treated as a compromise settlement negotiation and the entire process is confidential.
At least five (5) days prior to the initial mediation session, each party must deliver a written statement of positions.
Source: Item 23 — Receipts (FDD pages 43–157)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, the mediation requirement does apply to disputes involving a loan or other financial arrangement between All County (or its affiliates) and the franchisee. Prior to initiating arbitration, both parties must first attempt to resolve any disputes through mediation. This encompasses disputes arising from the franchise agreement itself, any lease or sublease for the franchisee's business, any loan or financial arrangements between All County and the franchisee, the relationship between the parties, the franchisee's business, or any operational standards.
The mediation process begins with a written Notification of Dispute, which outlines the facts, damages, and requested relief. The receiving party then has a set period to respond with their version of the facts and position on damages. Following the exchange of notifications, both parties are expected to work in good faith to resolve the dispute. If mediation fails to produce a resolution within thirty days, either party is then free to pursue arbitration.
Mediation sessions are to be held in Florida at a mutually agreed location, with attendance required by the franchisee's Principal Owners or Managing Owner and authorized representatives from All County. Both parties can be represented by legal counsel during mediation. The costs of the mediator are to be split equally between All County and the franchisee, while each party bears their own additional expenses related to the mediation. The entire mediation process is confidential, and all negotiations are treated as compromise settlement negotiations.
This mediation requirement is a standard practice in franchising, intended to provide a less costly and more efficient means of resolving disputes compared to litigation or arbitration. However, it's important to note that if a party fails to respond to the mediation notice within five days or does not participate in the mediation process, the other party can immediately proceed to arbitration, bypassing the mediation step entirely.