Before initiating arbitration for a dispute with Casiola, what prerequisite step must be taken?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
Notwithstanding the preceding paragraph, Franchisor and Franchisee agree this Sub-Article 18.G.(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 including, but not limited to, Franchisee's violation or purported violation of Article 6 of this Agreement; 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.
(2) Arbitration – Subject to the prerequisite requirements of non-binding mediation as set forth in Sub-Article 18.G.(1), and, except at Franchisor's election, as to 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 including, but not limited to, Franchisee's violation or purported violation of Article 6 of this Agreement, Franchisor and Franchisee agree that all disputes, controversies, and claims, arising from and/or related to this Agreement, the relationship between Franchisor and Franchisee, the System, and/or the validity of this Agreement and/or the Ancillary Agreements, shall be submitted, on demand of either Franchisor or Franchisee, to AAA for binding arbitration. Arbitration shall be conducted by one arbitrator in accordance with AAA's then current rules for commercial disputes, except as may be otherwise required in this Article 18.G. All arbitration proceedings shall be conducted in Orange County, Florida, or, if suitable AAA facilities are not available in Orange County,
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, before initiating arbitration, both the Franchisor and Franchisee must first participate in non-binding mediation. However, this prerequisite of non-binding mediation does not apply if the Franchisor elects to pursue injunctive relief against the Franchisee for breaches of the agreement, particularly those related to Article 6, or for claims related to the failure to pay fees or other monetary obligations.
This means that a franchisee generally needs to attempt to resolve disputes through mediation before moving to binding arbitration. Mediation is a process where a neutral third party helps facilitate a discussion and potential resolution between the franchisee and franchisor. It is non-binding, so either party can choose not to accept the outcome and proceed to arbitration.
However, Casiola retains the right to bypass mediation and proceed directly to other legal actions under specific circumstances. These circumstances include situations where Casiola seeks injunctive relief against a franchisee for violating the agreement or when either party is pursuing claims related to unpaid fees or monetary obligations. This exception favors Casiola, allowing them to expedite legal proceedings in certain critical situations, while the franchisee does not have the same option.
This clause highlights the importance of understanding the dispute resolution process outlined in the franchise agreement and the circumstances under which mediation can be bypassed. Prospective franchisees should carefully consider these provisions and seek legal counsel to fully understand their rights and obligations.