Before filing an arbitration action, what action is required for dispute resolution with Aw?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| PROVISION | SECTION IN FRANCHISE AGREEMENT | SUMMARY |
|---|---|---|
| u. Dispute resolution by arbitration | Sections 18.1 and | Disputes must be mediated before filing an |
| or mediation | 18.2 | arbitration action. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 34–36)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, before a franchisee can file an arbitration action to resolve a dispute, they must first attempt mediation. This requirement is detailed in Item 17, which summarizes key provisions of the franchise agreement related to dispute resolution.
Mediation is a process where a neutral third party helps the disputing parties reach a mutually agreeable solution. It is generally less formal and less expensive than arbitration or litigation. By requiring mediation first, Aw aims to resolve disputes amicably and efficiently, potentially avoiding the higher costs and longer timelines associated with formal arbitration proceedings.
This mediation requirement is a fairly common practice in franchising, as it encourages parties to communicate and find common ground before resorting to more adversarial methods. However, it's important to note that mediation may not always be successful, and if the parties cannot reach a resolution through mediation, the franchisee may then proceed to arbitration.