What happens if both parties in a Cinch I.T. dispute agree to waive mediation?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
- 21.2 If the dispute is not resolved pursuant to Section 21.1 above, 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 unless both Parties agree to waive mediation and proceed directly to arbitration as set forth in Section 21.3.
Each party will bear their own costs and fees of the mediation, however, the mediator's fee will be split equally between the Parties.
- 21.3 If the Parties have not resolved a claim, controversy or dispute by negotiation, mediation, or otherwise (which the Parties will make a diligent effort to do), the Parties agree that all controversies, claims and disputes between them arising out of or relating to this Agreement, the rights and obligations of the Parties hereto, or any other claims or causes of action relating to the performance of either party, and/or the development of the development rights by You shall be finally resolved by submitting this matter to binding arbitration under the auspices of, and using the commercial arbitration rules of, the American Arbitration Association as such rules are in effect as of the date the demand for arbitration is filed.
In accordance with the terms of the Federal Arbitration Act, the Arbitrator shall hear the dispute in the American Arbitration Association offices in Worcester, Massachusetts or their closest office thereto.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, if a dispute is not resolved through initial discussions, the parties involved will proceed to mediation as per the American Arbitration Association's (AAA) Commercial Arbitration Rules and Mediation Procedures. However, if both Cinch I.T. and the franchisee mutually agree to waive mediation, they can proceed directly to arbitration, as detailed in the FDD.
If the parties have been unable to resolve the dispute through negotiation, mediation, or other means, they can submit the matter to binding arbitration. This arbitration will occur under the rules of the American Arbitration Association. The arbitrator's decision will be final and binding for both parties. The arbitration hearing will take place at the American Arbitration Association offices located in Worcester, Massachusetts, or the closest office to that location.
This means that a Cinch I.T. franchisee has the option to bypass mediation and move directly to a legally binding arbitration process if both parties agree. This could potentially save time and mediation costs, but it also means foregoing an opportunity to resolve the dispute through a less formal and potentially more collaborative process. Franchisees should carefully consider the implications before agreeing to waive mediation, as arbitration results in a final, binding decision that is difficult to appeal.