Before initiating arbitration for a dispute with Bee Organized, what prerequisite step must be taken?
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 for any dispute related to the Franchise Agreement or the franchise relationship, both parties must first participate in non-binding mediation. This mediation is intended to be a preliminary step to try and resolve the dispute amicably before resorting to binding arbitration. The mediation will be conducted by the American Arbitration Association (AAA) following their rules for commercial disputes.
The mediation proceedings are to be held in Johnson County, Kansas. If a mediator isn't available there, the proceedings will take place at a location selected by the AAA mediator that is closest to Johnson County, Kansas. A single mediator will preside over the mediation, and if Bee Organized and the franchisee cannot agree on a mediator, the AAA will select one. The mediation must occur within 45 days of the AAA designating or acknowledging the selected mediator, although this period can be extended if both parties agree in writing.
Both Bee Organized and the franchisee are responsible for their own costs associated with the mediation. Additionally, they will each pay 50% of the mediator's fee and the AAA's mediation fees. This requirement ensures that both parties share the financial burden of attempting to resolve the dispute through mediation before moving to arbitration.