Who bears the costs of mediation if required in the Bombs Away Franchise Agreement?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
The Franchise Agreement requires mediation. The mediation will occur in Campbell, CA, with the costs being borne equally by Franchisor and Franchisee. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Mediation Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
Source: Item 23 — RECEIPTS (FDD pages 36–117)
What This Means (2024 FDD)
According to the 2024 Bombs Away Franchise Disclosure Document, if mediation is required, the costs will be shared equally between Bombs Away and the franchisee. The FDD specifies that the mediation will take place in Campbell, CA. This means a Bombs Away franchisee would need to travel to Campbell, CA for mediation.
This arrangement, where costs are split, is fairly standard in franchising. However, the requirement to mediate in Campbell, CA, could present a significant financial burden for franchisees located far from California, as they would incur travel and accommodation expenses in addition to their share of the mediation costs.
Prospective Bombs Away franchisees should consider these potential costs and the inconvenience of traveling to California when evaluating the franchise opportunity. It would be prudent to discuss the possibility of alternative mediation locations with Bombs Away during the negotiation phase, although the FDD suggests the agreement requires mediation to occur in Campbell, CA.