According to the Cinch I.T. agreement, is mediation binding?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| u. Dispute resolution by arbitration or mediation | Section 37 | The parties must first submit the dispute to non-binding mediation (except for injunctive relief). Certain disputes and claims related to the Franchise Agreement, however, will be settled by arbitration under the rules of the American Arbitration Association (subject to state law). |
| v. Choice of forum | Section 37 | Arbitration must be in the |
| county nearest our home | ||
| office at the time (subject to | ||
| state law). | ||
| w. Choice of law | Sections 37 and 48 | Federal Arbitration Act and |
| Massachusetts law applies | ||
| (subject to state law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 48–56)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the franchise agreement stipulates that disputes must first be submitted to mediation, but this mediation is non-binding, except when injunctive relief is sought. This means that while Cinch I.T. franchisees are required to attempt to resolve disputes through mediation, neither party is obligated to accept the outcome of the mediation process.
However, certain disputes and claims related to the Franchise Agreement will be settled by arbitration under the rules of the American Arbitration Association. The location for arbitration must be in the county nearest Cinch I.T.'s home office at the time, and the Federal Arbitration Act and Massachusetts law applies.
For a prospective Cinch I.T. franchisee, this means that while mediation is a required first step, it does not guarantee a resolution. If mediation fails, the dispute may proceed to arbitration, which will be binding. Franchisees should be aware of the costs and time associated with both mediation and arbitration, as well as the implications of having disputes resolved in a location potentially far from their own business.