factual

Who bears their own costs and fees of the mediation for Cinch I.T. franchise disputes?

Q: Who bears their own costs and fees of the mediation for Cinch I.T. franchise disputes?

- (ii) If the dispute is not resolved pursuant to Subsection 37(a)(i), the parties shall submit the dispute to mediation in accordance with the Commercial Arbitration Rules and Mediation Procedures (Including Procedures for Large, Complex Commercial Disputes) of the American Arbitration Association ("AAA") unless both parties agree to waive mediation and proceed directly to arbitration as set forth in Subsection 37(a)(iii). Each party will bear their own costs and fees of the mediation, however, the mediator's fee will be split equally between the parties. Source: Item 23 — RECEIPTS (FDD pages 60–269)

Cinch_I_T Franchise · 2024 FDD

Answer from 2024 FDD Document

(ii) If the dispute is not resolved pursuant to Subsection 37(a)(i), the parties shall submit the dispute to mediation in accordance with the Commercial Arbitration Rules and Mediation Procedures (Including Procedures for Large, Complex Commercial Disputes) of the American Arbitration Association ("AAA") unless both parties agree to waive mediation and proceed directly to arbitration as set forth in Subsection 37(a)(iii).

Each party will bear their own costs and fees of the mediation, however, the mediator's fee will be split equally between the parties.

Source: Item 23 — RECEIPTS (FDD pages 60–269)

What This Means (2024 FDD)

According to the 2024 Cinch I.T. Franchise Disclosure Document, in the event of a dispute that proceeds to mediation, each party involved will be responsible for covering their own costs and fees. This means that the franchisee will pay their legal fees and any other expenses they incur during the mediation process. However, the fees charged by the mediator will be split equally between Cinch I.T. and the franchisee.

This arrangement is fairly standard in franchising, as it ensures that both parties have a financial stake in the mediation process. By requiring each party to cover their own costs, it encourages them to approach the mediation in a serious and good-faith manner. Splitting the mediator's fee is also a common practice, as it promotes fairness and impartiality in the process.

For a prospective Cinch I.T. franchisee, this means that they should be prepared to incur legal and other expenses if a dispute arises and proceeds to mediation. It is important to factor these potential costs into their financial planning and to carefully consider the terms of the franchise agreement before signing. While mediation can be a valuable tool for resolving disputes, it is not without its costs, and franchisees should be aware of their responsibilities in this regard.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.

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