Who is responsible for the costs associated with mediation in a Bee Organized franchise dispute?
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, in the event of a dispute requiring mediation, both the franchisee and franchisor share the costs. Specifically, each party is responsible for their own costs associated with the mediation process. Additionally, the franchisee and Bee Organized will each pay 50% of the mediator's fee and any mediation fees charged by the American Arbitration Association (AAA).
This arrangement means that a franchisee entering into a dispute with Bee Organized will need to budget for their legal and consulting expenses, as well as half of the mediator's costs. This cost-sharing approach is relatively common in franchising, as it ensures both parties have a financial stake in resolving the dispute efficiently and fairly.
Mediation is required before either party can pursue arbitration. The mediation will be conducted through the American Arbitration Association (AAA) following their rules for commercial disputes. Unless otherwise agreed to in writing, the mediation will occur in Johnson County, Kansas, or the closest suitable location if a mediator isn't available in that county. The mediation should occur within 45 days of the mediator's designation by AAA.