Does the obligation to mediate apply to non-curable defaults by an Amorino franchisee?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
11.2 Mediation.
In the event of any dispute arising out of or in connection with this Agreement or the relationship of the parties hereto, including without limitation any claim related to termination or expiration of this Agreement and any claim for damages and/or compensation related thereto, the parties agree to submit the matter to mediation under the American Arbitration Association Commercial Mediation Rules. The mediation shall be conducted by one (1) mediator and shall take place not more than forty-five (45) days following the filing of a request for mediation in New York County, New York. The parties or their principals must personally attend and participate for a minimum of three (3) hours. This obligation to mediate shall not apply to non-curable defaults by you.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, franchisees are generally required to participate in mediation to resolve disputes with Amorino. Specifically, if a dispute arises related to the franchise agreement, the relationship between the parties, or claims related to termination or expiration, both parties must submit to mediation under the American Arbitration Association Commercial Mediation Rules. This mediation is to be conducted by a single mediator within 45 days of filing a request for mediation in New York County, New York, and principals must attend and participate for at least three hours.
However, there is a notable exception to this mediation requirement. The FDD clearly states that the obligation to mediate does not apply to non-curable defaults by the franchisee. This means that if Amorino believes a franchisee has committed a default that cannot be remedied, Amorino is not obligated to enter into mediation before pursuing other legal remedies, such as termination of the franchise agreement.
This exception could significantly impact a franchisee, as it allows Amorino to bypass mediation in situations where they deem the default to be non-curable. This could lead to quicker termination of the franchise agreement without the opportunity for the franchisee to negotiate or find a resolution through mediation. Prospective franchisees should carefully consider the implications of this clause and seek clarification from Amorino regarding what constitutes a non-curable default.