Where will binding arbitration occur for a Bee Organized franchise dispute, and who bears the costs?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) Non-Binding Mediation – Franchisee and Franchisor agree that before either party may bring any action, dispute and/or controversy arising from or related to this Agreement and/or the franchise relationship between Franchisor and Franchisee in arbitration, the parties must first mediate the dispute through non-binding mediation. Mediation shall be non-binding and shall be conducted by the American Arbitration Association ("AAA") in accordance with AAA's then current rules for the mediation of commercial disputes. All mediation proceedings shall be conducted in Johnson County, Kansas or, if a mediator is not available in Johnson County, Kansas, then at a suitable location selected by the mediator that is located closest to Johnson County, Kansas. Mediation shall be conducted by one mediator and if Franchisor and Franchisee cannot agree on a mediator then the mediator shall be selected by AAA. Mediation shall be conducted within 45 days of AAA's designation and/or acknowledgment of the selected mediator or such longer period as may be agreed to between Franchisor and Franchisee in writing and signed by each respective party. Franchisor and Franchisee shall each be responsible for their own costs associated with mediation and Franchisor and Franchisee shall each be responsible for and shall each pay 50% of the mediator's fee and AAA's mediation fees.
Source: Item 23 — RECEIPTS (FDD pages 54–218)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, before either party can initiate arbitration, they must first attempt non-binding mediation. This mediation will be conducted by the American Arbitration Association (AAA) following their commercial dispute mediation rules. The location for mediation is Johnson County, Kansas, or if a mediator isn't available there, at a location selected by the mediator closest to Johnson County, Kansas.
Both Bee Organized and the franchisee are responsible for their own mediation costs. They will also each cover 50% of the mediator's fees and AAA's mediation fees. The mediation should occur within 45 days of AAA's mediator designation, unless both parties agree to a longer period in writing.
For disputes that proceed to arbitration, the FDD does not specify a particular location. However, it does state that the franchise agreement is governed by Kansas law. Prospective franchisees should inquire with Bee Organized about the typical arbitration location and how costs are handled in arbitration, as the FDD only details the mediation process and associated costs. Note that amendments for Illinois, Washington, North Dakota, and Rhode Island franchisees may modify the standard arbitration terms.