How are the expenses of the mediation service shared between Aunt Millies Bakeries and the distributor?

According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, in the event of a dispute requiring mediation, the expenses of the mediation service itself are to be shared equally between Aunt Millies Bakeries and the distributor. This means that the cost of the mediator's fees and any administrative charges levied by the mediation service will be split 50/50. However, all other expenses related to the mediation, such as attorney fees, travel costs, and the cost of preparing documents, are the responsibility of the party that incurs them.

This arrangement is fairly standard in franchise agreements, as it ensures that both parties have a vested interest in resolving the dispute efficiently and cost-effectively. By sharing the direct costs of the mediation service, Aunt Millies Bakeries and the distributor are incentivized to engage in good-faith negotiations and avoid prolonging the process unnecessarily. This can help to preserve the business relationship and minimize the financial impact of the dispute.

It is important to note that this cost-sharing arrangement applies specifically to the expenses of the mediation service. If the mediation is unsuccessful and the dispute proceeds to arbitration or litigation, the allocation of costs and attorney's fees may be different, potentially shifting to the prevailing party as detailed in Section 11.6. Therefore, distributors should carefully consider the potential costs and benefits of mediation before initiating the process and be aware of the potential for additional expenses beyond the mediation service fees.