Who bears the costs of mediation for Canine Dimensions disputes?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
23.6 Mediation.
All claims or disputes between Franchisee and Franchisor or its affiliates arising out of, or in any way relating to, this Agreement, or any of the parties' respective rights and obligations arising out of this Agreement, shall be submitted first to mediation prior a hearing in binding arbitration or a trial court proceeding. The mediation will be conducted under the auspices of the AAA in accordance with AAA's Commercial Mediation Rules then in effect. The parties shall select a mediator according to the procedures specified in those rules. Franchisee may not commence any action against Franchisor or Franchisor's affiliates with respect to any such claim or dispute in any court unless mediation proceedings have been terminated either: (i) as the result of a written declaration of the mediator(s) that further mediation efforts are not worthwhile; or (ii) as a result of a written declaration by Franchisor. The parties shall each bear their own costs of mediation and shall share equally the filing fee imposed by AAA and the mediator's fees. Franchisor reserves the right to specifically enforce its right to mediation. Prior to mediation, and before commencing any legal action against Franchisor or Franchisor's affiliates with respect to any such claim or dispute, Franchisee must submit a notice to Franchisor, which specifies in detail, the precise nature and grounds of such claim or dispute. The parties agree that such mediation shall be conducted within five (5) miles of Franchisor's headquarters.
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, in the event of mediation, both the franchisee and franchisor are responsible for covering their own expenses. Specifically, each party bears its own costs related to the mediation process. Additionally, the filing fee imposed by the American Arbitration Association (AAA) and the mediator's fees are to be shared equally between the franchisee and Canine Dimensions. This arrangement ensures that neither party is disproportionately burdened by the costs associated with attempting to resolve disputes through mediation before pursuing binding arbitration or trial court proceedings.
This cost-sharing arrangement is fairly typical in franchise agreements, as it encourages both parties to approach mediation seriously and work towards a resolution. If one party had to bear all the costs, there might be less incentive for them to engage in meaningful negotiation. By splitting the fees, both Canine Dimensions and the franchisee have a financial stake in reaching a mutually agreeable outcome during mediation.
It's also important to note that the mediation is to be conducted under the rules of the American Arbitration Association (AAA), which provides a structured and impartial framework for the process. The mediation is to take place within five miles of Canine Dimensions' headquarters. Before initiating any legal action against Canine Dimensions, a franchisee must first submit a detailed notice specifying the nature and grounds for the claim or dispute.