What is the dependency between mediation and arbitration in the Amerispec Inspection Services dispute resolution process?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
- 21.1.2 Mediation.
If the Covered Dispute is not resolved informally as provided in Paragraph 21.1.1 (Informal Negotiation), the party alleging the Covered Dispute must submit the Covered Dispute for non-binding mediation.
All parties must attend and participate in the mediation.
The mediation shall be governed by the rules of the American Arbitration Association (the "AAA") before one mediator selected by the parties, and if the parties cannot agree upon the mediator, then a mediator selected by the AAA.
It is the intent of the parties that mediation shall be held not later than thirty (30) days after a written request for mediation shall have been served on the other parties.
The mediation shall be held in the metropolitan area of Company'sthen-current principal place of business (currently, Memphis, Tennessee) and shall not last more than one day, unless the parties agree otherwise.
The parties will split equally the cost of any mediation.
Any party may be represented by counsel and may, with permission of the mediator, bring persons appropriate to the proceeding.
- 21.1.3 Arbitration.
If the parties do not resolve the Covered Dispute after the conclusion of the mediation, such Covered Dispute must be subject to and resolved exclusively by binding arbitration. This means that all Covered Disputes that either party would otherwise have the legal right to sue for in court shall be subject to final and binding arbitration under the arbitration provisions setforth in this Paragraph 21.1.3 and not decided by a court or a jury. If there are any ambiguities in the terms or conditions of this Paragraph 21, it is the parties' intent that all ambiguities be resolved in favor of arbitration.
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to Amerispec Inspection Services's 2025 Franchise Disclosure Document, mediation is a prerequisite for arbitration in the resolution of covered disputes. If informal negotiation does not resolve the dispute, the party initiating the dispute must submit it for non-binding mediation. All parties are required to attend and participate in this mediation, which is governed by the rules of the American Arbitration Association (AAA). The mediation should occur within thirty days of a written request and typically lasts no more than one day, unless the parties agree otherwise, and the costs are split equally.
If mediation fails to resolve the covered dispute, the dispute must then be submitted to binding arbitration. This means that any covered disputes that either party would otherwise have the legal right to sue for in court will be subject to final and binding arbitration, and not decided by a court or a jury. The document states that any ambiguities in the terms or conditions of this section should be resolved in favor of arbitration.
This structured approach—informal negotiation, then mediation, and finally arbitration—aims to resolve disputes efficiently and avoid litigation. However, certain disputes, termed "Excepted Disputes" such as those relating to the use of Amerispec Inspection Services's Name and Marks or intellectual property, are not subject to these procedures and may be resolved through litigation. Additionally, either party retains the right to seek injunctive relief from a court to prevent irreparable harm while pursuing arbitration on the merits of the dispute.