What is the required first step in resolving disputes with Bang Cookies, before pursuing arbitration?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
| s. | Modification of the agreement | 18.L. | Requires writing signed by you and us, except for unilateral changes that we may make to the Manuals or our unilateral reduction of the scope of a restrictive covenant that we may make in our discretion. |
|---|---|---|---|
| t. | Integration/merger clauses | 18.M. | Only the terms of the Franchise Agreement and schedules to the Franchise Agreement and the respective signed exhibits to the Franchise Agreement are binding, subject to state law. Nothing in any agreement is intended to disclaim the express representations made in the Franchise Disclosure Document, its exhibits and amendments. |
| u. | Dispute resolution by arbitration or mediation | 18.G. | Except for certain claims for injunctive relief, all disputes must first be submitted to non-binding mediation in Bergen County, New Jersey and, if mediation is unsuccessful, then to binding arbitration in Bergen County, New Jersey. This provision is subject to applicable state law. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–49)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the initial step in resolving disputes, before proceeding to arbitration, is non-binding mediation. Specifically, all disputes, with the exception of certain claims for injunctive relief, must first be submitted to non-binding mediation in Bergen County, New Jersey. If this mediation is unsuccessful, the dispute may then proceed to binding arbitration, also in Bergen County, New Jersey. This process is subject to applicable state law, which could introduce variations or exceptions based on the franchisee's location.
For a prospective Bang Cookies franchisee, this means that before initiating a potentially costly and time-consuming arbitration process, they are required to attempt to resolve the dispute through mediation. Mediation involves a neutral third party who helps facilitate a discussion and negotiation between the franchisee and franchisor to reach a mutually agreeable solution. Because the mediation is non-binding, either party can reject the outcome and proceed to arbitration if they are not satisfied.
The requirement to mediate first can be beneficial as it offers a less adversarial and potentially more cost-effective way to resolve disagreements. It encourages open communication and creative problem-solving, which could preserve the business relationship between the franchisee and Bang Cookies. However, it's important to note that mediation's success depends on the willingness of both parties to compromise and negotiate in good faith.
Franchisees should be aware of the location specified for mediation and arbitration (Bergen County, New Jersey), as this could involve travel expenses and logistical challenges depending on where their franchise is located. Additionally, the FDD mentions that these dispute resolution provisions are subject to applicable state law, meaning that certain state laws may override or modify the procedures outlined in the franchise agreement. Therefore, consulting with a legal professional is crucial to understand the specific implications of these provisions in the franchisee's state.