What initial steps must be taken before instituting arbitration or litigation regarding the Camp Margaritaville Agreement?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
ARTICLE 7
DISPUTE RESOLUTION
- (a) The Parties agree that their collective interests are served by resolving disputes regarding this Agreement through discussion and mediation, without using the arbitration process, whenever reasonably possible.
- (b) The Parties agree that, as a condition precedent to the institution of any arbitration or litigation of issues among or between them regarding this Agreement, the following efforts shall be undertaken:
- (i) All disputes must be discussed within five (5) business days of either Party's request between Buffett (or his Estate) and Margaritaville's Chief Executive Officer (or the equivalent) or the next most senior person ("Authorized Parties"), for a minimum of one (1) hour before mediation or arbitration can be used;
- (ii) If the dispute is not resolved in that manner, any Party may invoke mandatory mediation of the dispute utilizing the services of an independent mediator under the jurisdiction of the American Arbitration Association ("AAA") (the "Mediator").
- (iii) The Mediator shall be selected by mutual agreement of the Parties. The costs of the Mediator shall be shared equally between the Parties to the particular dispute. The mediation shall take place in Palm Beach, Florida.
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, before starting arbitration or litigation about the franchise agreement, both parties must first try to resolve the issue through discussion and mediation. Within five business days of a request from either party, representatives from both sides must discuss the dispute for at least one hour. These representatives include Buffett (or his Estate) and Margaritaville's Chief Executive Officer (or the equivalent) or the next most senior person.
If the dispute remains unresolved after this discussion, either party can then request mandatory mediation. This mediation will be conducted by an independent mediator under the American Arbitration Association (AAA). The mediator will be chosen through mutual agreement between the parties, and the costs of the mediator will be split equally. The location for the mediation is set in Palm Beach, Florida.
These steps are preconditions to initiating arbitration or litigation, meaning they must be completed before either party can move forward with those formal legal processes. This requirement reflects an intention to resolve disputes amicably and efficiently, potentially saving both parties time and money by avoiding more adversarial and costly proceedings. Franchise agreements often include such dispute resolution steps to encourage settlement before resorting to arbitration or litigation.