Who is responsible for the costs associated with mediation for C3 Wellness Spa disputes?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
7.6 CHOICE OF LAW, NON-BINDING MEDIATION, BINDING ARBITRATION, AND CONSENT TO JURISDICTION
(1) Non-Binding Mediation – Franchisee and Franchisor agree that before either party may bring any action, dispute and/or controversy arising from or related to this Agreement and/or the franchise relationship between Franchisor and Franchisee in arbitration, the parties must first mediate the dispute through non-binding mediation. Mediation shall be non-binding and shall be conducted by the American Arbitration Association ("AAA") in accordance with the AAA's then current rules for the mediation of commercial disputes. All mediation proceedings shall be conducted in Osceola County, Florida or, if a mediator is not available in Osceola County, Florida then at a suitable location selected by the mediator that is located closest to Osceola County, Florida. Mediation shall be conducted by one mediator and if Franchisor and Franchisee cannot agree on a mediator then the mediator shall be selected by the AAA. Mediation shall be conducted within 45 days of the AAA's designation and/or acknowledgment of the selected mediator or such longer period as may be agreed to between Franchisor and Franchisee in writing signed by each respective party. Franchisor and Franchisee shall each be responsible for their own costs associated with mediation and Franchisor and Franchisee shall each be responsible for and shall each pay 50% of the mediator's fee and the AAA's mediation fees.
Notwithstanding the preceding paragraph, Franchisor and Franchisee agree this Sub-Section 7.6(1) and, thereby, the prerequisite requirement of non-binding mediation, shall not, at Franchisor's election, apply to: (a) any claims or disputes related to or concerning a breach of
this Agreement by Franchisee that, under the terms of this Agreement, may entitle Franchisor to the award of injunctive relief; and/or (b) claims by either Franchisor or Franchisee under this Agreement that relates to either Franchisor's or Franchisee's failure to pay fees or other monetary obligations due under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to the 2024 C3 Wellness Spa Franchise Disclosure Document, both the franchisor and franchisee are responsible for their own costs associated with mediation. They are also each responsible for paying 50% of the mediator's fee and the American Arbitration Association's (AAA) mediation fees.
This means that a franchisee entering into a dispute with C3 Wellness Spa will need to budget for their own legal and consulting costs, as well as half of the mediator's fees. The mediation will be conducted by the AAA in accordance with their rules for commercial disputes. Unless both parties agree otherwise in writing, the mediation proceedings will occur in Osceola County, Florida, or the closest suitable location if a mediator is unavailable there. The mediation should occur within 45 days of the AAA designating a mediator.
However, the requirement for non-binding mediation does not apply if C3 Wellness Spa seeks injunctive relief for a breach of the agreement by the franchisee, or for claims related to the failure to pay fees or other monetary obligations. In these specific cases, C3 Wellness Spa can elect to bypass mediation and proceed directly to arbitration or other legal actions. This exception favors the franchisor, allowing them to quickly address payment issues or breaches that require immediate action.