Who bears the costs of mediation in a dispute involving a Buff City Soap franchise?

According to the 2025 Buff City Soap Franchise Disclosure Document, in the event of a dispute requiring non-binding mediation, both the franchisor and the franchisee share the costs. Each party is responsible for their own individual costs, while the expense of the mediator or mediation service itself is split equally between Buff City Soap and the franchisee. This arrangement applies before either party can initiate a formal legal action against the other, with certain exceptions.

This cost-sharing arrangement is a fairly standard practice in franchising, as it ensures that neither party is unduly burdened by the mediation process. It also encourages both parties to approach mediation in good faith, knowing that they will be responsible for a portion of the expenses. However, it's important to note that this applies specifically to mediation costs. Any legal fees or other expenses incurred if the dispute escalates beyond mediation would be the responsibility of the individual party.

It's also important to note that there are exceptions to this mediation requirement. Specifically, disputes related to the improper use of Buff City Soap's trademarks, breaches of certain covenants, or the franchisee's failure to make payments for royalty fees, brand fund contributions, or other amounts owed to the franchisor are not subject to this mediation requirement. In these cases, Buff City Soap is not required to engage in mediation before pursuing legal action.

Prospective Buff City Soap franchisees should carefully consider these dispute resolution terms and understand their financial responsibilities in the event of a disagreement with the franchisor. Understanding these costs and procedures is a crucial part of evaluating the overall franchise opportunity.