Does the Beem Light Sauna agreement require mandatory pre-litigation mediation?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.2 Mandatory Pre-Litigation Mediation. Except as otherwise provided in this Section, prior to filing any proceeding to resolve any dispute based upon, arising out of, or in any way connected with this Agreement, a party must submit the dispute for mediation.
- (a) Conduct of Mediation. All parties must attend and participate in the mediation. It is the intent of the parties that mediation shall be held not later than 14 days after a
written request for mediation shall have been served on the other parties. The mediation will be held before one mediator selected by the parties, and if the parties cannot agree upon the mediator, then a mediator selected by the American Arbitration Association ("AAA"). The mediation shall not last more than one day and shall be held in the metropolitan area of our thencurrent principal place of business. The mediation shall be governed by the rules of the AAA.
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna Franchise Disclosure Document, franchisees are required to participate in mandatory pre-litigation mediation before filing any legal proceedings related to the franchise agreement. This means that before a franchisee can sue Beem Light Sauna, they must first attempt to resolve the dispute through mediation.
The mediation process involves both parties attending and participating in a mediation session with a selected mediator. The FDD specifies that the mediation should occur within 14 days of a written request and last no more than one day. The mediation will take place in the metropolitan area of Beem Light Sauna's principal place of business. If the parties cannot agree on a mediator, the American Arbitration Association (AAA) will select one. The rules of the AAA will govern the mediation process.
This requirement for mandatory pre-litigation mediation is a fairly common practice in franchising. It is intended to provide a less costly and more efficient way to resolve disputes compared to litigation. It also gives both parties an opportunity to find common ground and potentially preserve their business relationship. However, it is important to note that mediation does not guarantee a resolution, and if mediation is unsuccessful, the franchisee still retains the right to pursue legal action.