Does the requirement to attempt internal dispute resolution with Baya Bar survive the termination or expiration of the Franchise Agreement?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 20.1 Internal Dispute Resolution. Franchisee shall first bring any claim, controversy or dispute arising out of or relating to this Agreement, the Attachments hereto or the relationship created by this Agreement to Franchisor's president and/or chief executive officer for resolution. After providing notice as set forth in Section 21.7 below. Franchisee must exhaust this internal dispute resolution procedure before Franchisee may bring Franchisee's dispute before a third party. This agreement to first attempt resolution of disputes internally shall survive termination or expiration of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the agreement to first attempt internal resolution of disputes with the franchisor does indeed survive the termination or expiration of the Franchise Agreement. This means that even after the franchise agreement ends, a franchisee is still obligated to try to resolve any claims, controversies, or disputes with Baya Bar's president and/or chief executive officer before pursuing other avenues such as mediation or legal action.
This requirement to exhaust internal dispute resolution procedures before seeking third-party intervention can have significant implications for a franchisee. It essentially adds an extra step to the dispute resolution process, potentially delaying the time it takes to reach a resolution. While internal dispute resolution might offer a quicker and less expensive way to resolve issues, it could also be perceived as a hurdle, especially if the franchisee believes that Baya Bar is unlikely to be impartial or receptive to their concerns.
It is fairly common in franchising to see requirements for mediation or arbitration, but the added layer of mandatory internal dispute resolution is less typical. Franchisees should carefully consider the potential benefits and drawbacks of this provision, assessing whether it is likely to facilitate resolution or simply prolong disputes. Understanding this obligation is crucial for any prospective Baya Bar franchisee as it dictates the initial steps they must take in case of disagreements with the franchisor, even after the franchise relationship has ended.