Can the 90-day mediation period for Closet Storage Concepts disputes be extended?

According to Closet Storage Concepts' 2025 Franchise Disclosure Document, if a claim, controversy, or dispute arises, both Closet Storage Concepts and the franchisee agree to first submit to mediation before pursuing legal action, with certain exceptions for actions involving monies owed, injunctive relief, or disputes related to real property, trademarks, or confidential information. The mediation should be conducted by a mutually agreed-upon mediator or through the American Arbitration Association if an agreement cannot be reached within 15 days of either party expressing the desire for mediation. The mediation will take place within 20 miles of Closet Storage Concepts' headquarters. The costs of mediation, excluding attorney fees, will be split equally between the parties. Failure to pay mediation costs constitutes a breach of the agreement.

The FDD states that if the parties cannot resolve the issue within 90 days after the mediator is chosen, either party may initiate litigation. However, this 90-day period can be extended if both parties agree to it in writing. This provides flexibility for Closet Storage Concepts and its franchisees to continue mediation efforts beyond the initial timeframe if progress is being made and both parties believe a resolution is still possible through mediation.

This clause is fairly standard in franchise agreements, as mediation is often seen as a less costly and more amicable way to resolve disputes compared to litigation. The option to extend the 90-day period with a written agreement allows for continued negotiation, potentially avoiding the need for expensive and time-consuming legal battles. Prospective Closet Storage Concepts franchisees should understand this process and their rights and obligations regarding mediation, as it could be a crucial step in resolving any disagreements that may arise during the franchise term.