What happens if a party refuses to participate in mediation with Alloy?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Before any party may bring an action in court or against the other, or commence an arbitration proceeding (except as noted below), the parties must first meet to mediate the dispute. Specifically, no litigation or arbitration action may be commenced until the earlier of thirty (30) days from written notice by one party to the other of a request to initiate mediation, or the mutual agreement by both parties that mediation has been unsuccessful if the notified party fails to respond to the requesting party within thirty (30) days of notification. The mediation will be held in the county where our headquarters are then located (currently, Roswell, Georgia). Any such mediation will be non-binding and conducted by the American Arbitration Association in accordance with its then-current rules for mediation of commercial disputes. Prior to the mediation, each party involved in the mediation must sign the standard confidentiality agreement designated by us or the
mediator. The mediator will be disqualified as a witness, expert or counsel for any party with respect to the dispute or any related matter. Mediation is a compromise negotiation and will constitute privileged communications under the law governing this Agreement. The entire mediation process will be confidential and the conduct, statements, promises, offers, views and opinions of the mediator and the parties will not be discoverable or admissible in any legal proceeding for any purposes; provided, however, that evidence which is otherwise discoverable or admissible will not be excluded from discovery or admission as a result of its use in the mediation. The parties will share equally all fees and expenses of the mediator.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, before a party can initiate a lawsuit or arbitration against the other, both parties must first attempt to mediate the dispute. A party must provide written notice to the other of a request to initiate mediation, and no litigation or arbitration can begin until the earlier of 30 days from this notice, or mutual agreement that mediation has failed. If the notified party does not respond to the mediation request within 30 days, it is considered that mediation has been unsuccessful, and the other party can proceed with litigation or arbitration.
The mediation will occur in the county where Alloy's headquarters is located, which is currently Roswell, Georgia. The mediation will be non-binding and will be conducted according to the American Arbitration Association's rules for commercial disputes. Both parties must sign a standard confidentiality agreement before the mediation begins, and the mediator is disqualified from being a witness, expert, or counsel in any related legal proceedings.
Since the mediation is non-binding, either party can refuse to agree to a settlement during mediation. However, a party cannot refuse to participate in the mediation process altogether. If a party fails to respond to a request for mediation within 30 days, the other party is free to proceed with a lawsuit or arbitration. This requirement ensures that both parties make an effort to resolve disputes through mediation before resorting to more formal and costly legal proceedings.