Does the non-binding mediation requirement apply to disputes related to the Ancillary Agreements for a Casiola franchise?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
(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 AAA's then current rules for the mediation of commercial disputes. All mediation proceedings shall be conducted in Orange County, Florida or, if a mediator is not available in Orange County, Florida, then at a suitable location selected by the mediator that is located closest to Orange 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 AAA. Mediation shall be conducted within 45 days of 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 and 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 AAA's mediation fees.
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, disputes related to the Ancillary Agreements are subject to non-binding mediation before arbitration. Specifically, all disputes, controversies, and claims arising from or related to the Franchise Agreement, the relationship between the franchisor and franchisee, the System, and/or the validity of the Franchise Agreement and/or the Ancillary Agreements, must first go through non-binding mediation before being submitted to binding arbitration. This mediation is conducted through the American Arbitration Association (AAA) in Orange County, Florida, following AAA's rules for commercial disputes.
Both Casiola and the franchisee are responsible for their own costs associated with the mediation. They also share the mediator's and AAA's fees equally, each paying 50%. The mediation should occur within 45 days of the AAA designating or acknowledging the selected mediator, unless both parties agree to a longer period in writing.
However, there are exceptions where Casiola can elect to bypass the non-binding mediation requirement. These exceptions include claims related to a breach of the Franchise Agreement by the franchisee that may entitle Casiola to injunctive relief, such as violations of Article 6 of the agreement, and claims related to the failure to pay fees or other monetary obligations under the agreement. In these specific cases, Casiola can choose to proceed directly to arbitration without first engaging in mediation.