What are the parties expected to do in good faith during a City Publications mediation?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
Any controversy or claim, other than those arising from falsification of reports, abandonment, those regarding trademark infringement, and non-compete provisions, arising out of or relating to this contract, or the breach thereof, shall be subject to non-binding mediation. The Mediator will be appointed in accordance with the Rules and Regulations of the American Arbitration Association unless the parties agree on a Mediator in writing within ten (10) days after either party gives written notice of Mediation. If either party alleges a dispute or controversy against the other party for any reason, except for those specified above, then that party will have the right to demand non-binding Mediation within the (10) days after the complaining party provides the other party with written notice describing the dispute or controversy. Al
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, any controversy or claim arising from the franchise contract, excluding those related to report falsification, abandonment, trademark infringement, and non-compete provisions, will undergo non-binding mediation. The mediator will be selected according to the American Arbitration Association's rules, unless both parties agree on a mediator within ten days of receiving a written mediation notice. If a party has a dispute against the other, they can demand non-binding mediation within ten days of providing written notice detailing the issue.
This mediation process is designed to encourage parties to resolve disputes amicably before resorting to more formal and costly legal proceedings like arbitration or litigation. By engaging in non-binding mediation, City Publications franchisees and the franchisor can attempt to find common ground and negotiate a mutually acceptable resolution with the help of a neutral third party. The exclusion of certain types of disputes (falsification of reports, abandonment, trademark infringement and non-compete provisions) suggests that City Publications prefers to handle these more serious violations through stricter legal channels.
For a prospective City Publications franchisee, understanding this mediation clause is crucial. It outlines the initial steps to be taken in case of a disagreement with the franchisor. While mediation is non-binding, meaning neither party is forced to accept the mediator's suggestions, it represents an opportunity to resolve issues efficiently and potentially preserve the franchise relationship. Franchisees should be aware of the specific types of disputes that are excluded from mediation and understand the implications of those exclusions.
It is also important to note that the rules of the American Arbitration Association will govern the selection of the mediator unless both parties can agree on one independently. This ensures a fair and structured process for choosing a mediator. The ten-day window for responding to a mediation notice emphasizes the importance of timely communication and action in the event of a dispute. Prospective franchisees should consult with legal counsel to fully understand their rights and obligations under this mediation clause and to prepare for potential disputes that may arise during the franchise term.