What rules govern the mediation process for Belocal franchise disputes?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Mediation. Before Franchisee and its Principals or Franchisor may bring an action against the other, the parties must first meet to mediate the dispute (except as otherwise provided below). Any such mediation shall be non-binding. Mediation shall be conducted in accordance with the American Arbitration Association ("AAA") rules for mediation of commercial disputes and held in the city in which Franchisor maintains its principal business office at the time of the mediation. The mediator must be experienced in franchising or franchise law and have no prior business or professional relationship with either party. Notwithstanding the foregoing, the parties may mutually agree on a mediator, procedures, and/or venue for mediation. The non-binding mediation provided for herein shall be commenced by the party requesting mediation ("complainant") providing written notice of the request for mediation to the party with whom mediation is sought ("respondent"). The request shall specify with reasonable particularity the matter or matters on which non-binding mediation is sought. A copy of the request shall be given by the complainant simultaneously to Franchisor if Franchisor is not a complainant or respondent. Mediation commenced under this Section 14.B. shall be concluded within sixty (60) days of the issuance of the request or such longer period as may be agreed upon by the parties in writing. All aspects of the mediation process shall be treated as confidential, shall not be disclosed to others, and shall not be offered or admissible in any other proceeding or legal action of any kind. Complainant and respondent shall each bear their own costs of mediation, and each shall bear one-half the cost of the mediator or mediation service.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, before a franchisee or Belocal can initiate a lawsuit against the other, they must first attempt to mediate the dispute. This mediation is non-binding, meaning that neither party is forced to accept the outcome proposed by the mediator. The mediation process will follow the American Arbitration Association (AAA) rules for commercial disputes. The location for mediation will be the city where Belocal has its primary business office at the time of the mediation, unless both parties agree to a different location. The mediator chosen must have experience in franchising or franchise law and must not have had any prior business or professional connections with either Belocal or the franchisee, unless both parties agree to a different mediator.
The party initiating the mediation (the complainant) must provide written notice to the other party (the respondent), detailing the specific issues to be mediated. If Belocal is not the complainant or respondent, a copy of the mediation request must also be sent to Belocal. The mediation process must conclude within 60 days of the initial request, although this period can be extended if both parties agree in writing. All aspects of the mediation are to be kept confidential and are not admissible in any subsequent legal proceedings.
Regarding the costs associated with mediation, each party is responsible for their own expenses. The cost of the mediator or mediation service will be split equally between the complainant and the respondent. This arrangement is fairly standard in franchise agreements, as it encourages both parties to participate in the mediation process in good faith. Franchisees should be aware of these mediation terms, as they outline the required steps and cost implications before pursuing legal action against Belocal.