Prior to initiating arbitration or litigation, what is Aw franchise required to do?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
not arising from this Agreement, shall not constitute a defense to the enforcement by us of the covenants not to compete set forth in this Agreement. You further agree to pay all costs and expenses (including reasonable attorneys' and experts' fees) incurred by the us in connection with the enforcement of those covenants not to compete set forth in this Agreement.
18. DISPUTE RESOLUTION
18.1 Mandatory Mediation. Except for actions pursuant to Paragraph 18.3 below, prior to the initiation of arbitration or litigation by either party pursuant to this Agreement, the parties must make a good faith effort to resolve any controversies between them by non-binding mediation either through a mutually acceptable mediator or through an established mediation service selected by us (in either case, "Mediator"). Prior to mediation, each party involved in mediation shall sign the standard confidentiality agreement reasonably required by Mediator or a confidentiality agreement reasonably required by us if the Mediator does not have a standard confidentiality agreement.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, before starting arbitration or litigation, both parties must first try to resolve any disputes through non-binding mediation. This involves a good faith effort to work with a mutually agreed-upon mediator or a mediation service selected by Aw.
Before mediation begins, both parties must sign a standard confidentiality agreement provided by the mediator or Aw. Neither party can start arbitration or litigation until at least 30 days have passed since the mediator was selected. Alternatively, if both parties agree that mediation has failed, or if the notified party doesn't respond to the mediation request within 30 days, arbitration or litigation can proceed.
The costs and expenses associated with the mediator are to be shared equally between the parties involved. This mandatory mediation step is designed to encourage resolution before escalating to more formal and costly legal proceedings, potentially saving both Aw and its franchisees time and money.