What is the status of negotiations and mediation proceedings in an All Team franchise dispute regarding admissibility in court?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
- Mediation. Before any party may bring an action in court for any controversy, dispute or claim between ATFC and USER arising from this Agreement or the franchise relationship, the parties must first have a conference with each other to try to resolve the dispute. If this fails to bring about a resolution, the dispute will first be submitted to non-binding mediation (the "Mediation") in Tampa, Florida unless the parties mutually agree to another location. The Mediation shall be conducted in accordance with then-current AAA mediation rules (the "AAA Mediation Rules") except to the extent the AAA Mediation Rules differ from the terms of this Agreement, in which event the terms of this Agreement shall be applied. Notwithstanding the foregoing, the mediation does not have to be conducted under the AAA. ATFC and USER will select the mediator. If the parties cannot agree on the selection of a mediator, the mediation shall be conducted through the AAA who will make the selection of mediator using their rules and guidelines. The cost of the Mediation, including the mediator's fee and expenses, shall be paid by the USER. All negotiations and mediation proceedings (including without limitation, discovery conducted therein, as well as all statements and settlement offers made by either party or the mediator in connection with the Mediation) shall be strictly confidential, shall be considered as compromise and settlement negotiations for purposes of the Federal Rules of Evidence and state rules of evidence, and shall not be admissible or otherwise used in connection with any court or arbitration proceeding for any purpose. The mediator may not be called as a witness in any court or arbitration proceeding for any purpose. If the parties, after a good faith effort to settle the dispute using Mediation, are unable to reach settlement, ATFC and USER agree that the dispute will be resolved according to the Sections below. Failure to submit the dispute to Mediation prior to commencing any litigation or arbitration proceeding shall be grounds for dismissal of the litigation or arbitration proceedings.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, before a franchisee (USER) can bring an action in court against All Team Franchise Corporation (ATFC) for any dispute related to the franchise agreement or relationship, both parties must first participate in a conference to attempt to resolve the issue. If the conference is unsuccessful, the dispute must then be submitted to non-binding mediation in Tampa, Florida, unless both parties agree to a different location. The mediation should follow the American Arbitration Association (AAA) mediation rules, but the terms of the franchise agreement will take precedence if there are any conflicts. The mediation does not have to be conducted under the AAA.
The FDD states that All Team and the franchisee will jointly select a mediator. If they cannot agree, the AAA will select the mediator according to its rules. The franchisee is responsible for covering the costs of the mediation, including the mediator's fees and expenses.
All negotiations and mediation proceedings, including any discovery, statements, and settlement offers made by either party or the mediator, are to be kept strictly confidential. These proceedings are considered compromise and settlement negotiations for the purposes of federal and state rules of evidence, and they are not admissible or to be used in any court or arbitration proceeding. Furthermore, the mediator cannot be called as a witness in any court or arbitration proceeding. If mediation fails to resolve the dispute after a good faith effort, the dispute will be resolved according to further sections outlined in the agreement. Failure to participate in mediation before starting litigation or arbitration can result in dismissal of those proceedings.