Does the Cinch I.T. development agreement specify any exceptions to the requirement of non-binding mediation before arbitration?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
disclaim the express representations made in the Franchise Disclosure Document, its exhibits and amendments. |
| Provision | Section in development agreement | Summary | |
|---|---|---|---|
| u. | Section 21 | The parties must first submit the | |
| Dispute resolution by | |||
| arbitration or mediation | dispute to non-binding mediation (except for injunctive relief). |
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 Multi-Unit Development Agreement mandates that disputes first undergo non-binding mediation before proceeding to arbitration. However, there is an exception to this rule.
The summary table in Item 17 outlines that the requirement for non-binding mediation does not apply when seeking injunctive relief. This means that Cinch I.T. or the franchisee can bypass mediation and immediately pursue legal action, such as an injunction, if they believe immediate court intervention is necessary to prevent irreparable harm.
This exception is fairly standard in franchise agreements, as injunctive relief is typically sought in situations demanding urgent action, such as intellectual property infringement or breaches of confidentiality. The agreement also states that most disputes and claims related to the Multi-Unit Development Agreement will be settled by arbitration at the location of the American Arbitration Association office nearest to Cinch I.T.'s principal place of business, which is currently Worcester, Massachusetts.