Before filing an arbitration action, what dispute resolution method must be used 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 against Aw, they must first attempt to resolve the dispute through mediation. This is a common practice in franchising, as mediation offers a less formal and potentially more cost-effective way to address disagreements.
The requirement to mediate before arbitrating is outlined in Item 17 of the FDD, which covers dispute resolution. Specifically, Sections 18.1 and 18.2 of the franchise agreement mandate mediation as a preliminary step. This means that if a dispute arises between Aw and a franchisee, both parties are obligated to participate in a mediation process before pursuing arbitration.
Mediation typically involves a neutral third party who helps facilitate communication and negotiation between the disputing parties. The mediator does not make a decision or impose a solution but instead assists the parties in reaching a mutually agreeable resolution. If mediation is unsuccessful, the franchisee can then proceed with filing an arbitration action, as per the franchise agreement. This mediation requirement aims to encourage early resolution of conflicts and potentially avoid the more formal and expensive process of arbitration.