If negotiation fails for Cinch I.T., what is the next step in resolving a dispute?

According to Cinch I.T.'s 2024 Franchise Disclosure Document, if negotiation fails to resolve a dispute, the next step is mediation. Both parties are required to submit to mediation according to the Commercial Arbitration Rules and Mediation Procedures of the American Arbitration Association (AAA), unless both parties agree to waive mediation and proceed directly to arbitration.

During mediation, each party is responsible for covering their own costs and fees. However, the mediator's fee will be split equally between Cinch I.T. and the franchisee. This encourages both parties to engage in the mediation process seriously, as they both have a financial stake in reaching a resolution during mediation rather than incurring further costs through arbitration.

If mediation is unsuccessful, the parties must then proceed to binding arbitration under the auspices of the American Arbitration Association, using its commercial arbitration rules. Cinch I.T. emphasizes that both parties are expected to make a diligent effort to resolve disputes through negotiation and mediation before resorting to arbitration. This structured approach—negotiation, then mediation, and finally arbitration—is a common method for resolving disputes in franchising, aiming to minimize legal costs and preserve the business relationship where possible.