What is the dependency between mediation and arbitration for Alloy disputes?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Except for disputes that involve injunctive relief or specific performance actions covered under subparagraph 12.B and prior to either party filing arbitration, the parties agree to mediate any dispute between you and us or any of our or your affiliates, including, without limitation, your owners and guarantors, arising under, out of, in connection with or in relation to this Agreement, or the Facility or Authorized Location, the parties' relationship, or the business; provided that the party seeking mediation must notify the other party of its intent to mediate prior to the termination of this Agreement.
Mediation will be conducted in the county in which our headquarters are then located (currently, Roswell, Georgia), or at such other place as may be mutually agreeable to the parties, by a mediator or mediation program agreed to by the parties.
Persons authorized to settle the dispute must attend any mediation session.
The parties agree to participate in the mediation proceedings in good faith with the intention of resolving the dispute if at all possible within 30 days of the notice from the party seeking to initiate the mediation procedures.
If not resolved within 30 days, or if one party refuses to participate in mediation as outlined herein, the parties are free to pursue arbitration.
Mediation is a compromise negotiation for purposes of the federal and state rules of evidence, and the entire process is confidential.
The parties agree that each party will pay fifty percent (50%) of the total of mediation fees and all costs associated with mediation.
- (ii) Except as qualified below in subparagraph 12.B and subject to the mediation obligation set forth above, any dispute between you and us or any of our or your affiliates arising under, out of, in connection with or in relation to this Agreement, the parties' relationship, or your Facility or Facility must be submitted to binding arbitration under the authority of the Federal Arbitration Act and must be determined by arbitration administered by the American Arbitration Association pursuant to its then-current commercial arbitration rules and procedures.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, mediation is a prerequisite to arbitration, with a few exceptions. Before either party can file for arbitration, they must first attempt to mediate any dispute, except for those involving injunctive relief or specific performance actions. The party seeking mediation must notify the other party of their intent before the termination of the Franchise Agreement.
The mediation will occur in the county where Alloy's headquarters is located, currently Roswell, Georgia, unless both parties agree to another location. Individuals authorized to settle the dispute must attend the mediation session and participate in good faith, aiming to resolve the issue within 30 days of the initial notice. Both parties will equally share the mediation fees and associated costs.
If the dispute remains unresolved after 30 days, or if one party refuses to participate in mediation, the parties are then free to pursue binding arbitration. This arbitration will be conducted under the Federal Arbitration Act and administered by the American Arbitration Association, following its commercial arbitration rules and procedures. This means that franchisees must first engage in mediation before proceeding to arbitration, potentially saving time and expenses through a collaborative resolution process. However, if mediation fails or is refused, the franchisee retains the right to pursue a binding arbitration.