Where will mediation take place for disputes related to the Buona franchise agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Do you understand all disputes or claims you may have arising out of or relating to the Franchise Agreement must be arbitrated in Illinois, if not resolved informally or by mediation?
24.2 Arbitration. Except for controversies, disputes or claims related to or based on Franchisee's use of the Marks or Confidential Information, Franchisee's compliance with its noncompetition obligations and any rights Franchisor may have to possession of the premises of the Franchised Business under any sublease, lease or collateral assignments, all controversies, disputes or claims between Franchisor, its affiliates, and their respective owners, officers, directors, agents, employees and attorneys, and Franchisee (its affiliates and owners and guarantors, if applicable), arising out of or related to this Agreement or any other agreement between the parties; the parties' rights and obligations under this Agreement; Franchisor's relationship with Franchisee or the obligations by and between the parties; or the validity of this Agreement or any other agreement between Franchisor and Franchisee or any provision of such agreements, will be submitted to binding Arbitration administered by the American Arbitration Association ("AAA") in accordance with the AAA's thencurrent Commercial Arbitration Rules. The arbitration hearing shall take place in Cook County, Illinois, before a single arbitrator.
Franchisor shall have no obligation to mediate claims that are the subject of Paragraph 12.2 herein.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
Based on the 2025 Buona Franchise Disclosure Document, while the document does not explicitly state where mediation will occur, it does state that any disputes or claims arising out of or relating to the Franchise Agreement must be arbitrated in Illinois, if not resolved informally or by mediation. The FDD also states that the arbitration hearing shall take place in Cook County, Illinois.
Although the FDD does not specify the location of mediation, it is reasonable to assume that mediation, as a precursor to arbitration, would likely occur in a similar geographic location, potentially Cook County, Illinois, given the arbitration clause. This is a common practice in franchising, where mediation and arbitration are often conducted in the franchisor's home state to reduce their travel costs and ensure consistency in legal proceedings.
A prospective Buona franchisee should clarify with Buona where mediation is expected to take place. Understanding the location for mediation is crucial for budgeting potential legal and travel expenses should a dispute arise during the franchise term. It is also important to note that the FDD states that the Franchisor has no obligation to mediate claims that are the subject of Paragraph 12.2, which relates to specific performance and injunctive relief.