How are the costs of mediation allocated between the parties in a Closet Storage Concepts dispute?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
The costs and expense of mediation, including the compensation and expenses of the mediator (but excluding attorneys' fees and costs incurred by either party), shall be borne by the parties equally.
Failure to timely pay the costs and expenses of mediation, including the compensation and expenses of the mediator, by either party shall constitute a material breach of this Agreement.
If the parties are unable to resolve the claim, controversy or dispute within ninety (90) days after the mediator has been chosen, then, unless such time is extended by written agreement of the parties, either party may institute litigation.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, mediation is required before bringing a claim to court, except for specific actions like those involving monies owed, injunctive relief, real property, trademarks, or confidential information. The mediation will be conducted by an agreed-upon mediator or, failing agreement, by the American Arbitration Association. The mediation must be held within 20 miles of Closet Storage Concepts' headquarters.
The costs and expenses of mediation, excluding legal fees, are to be shared equally between Closet Storage Concepts and the franchisee. Failure to pay these costs constitutes a material breach of the franchise agreement.
If the parties cannot resolve the dispute within 90 days after the mediator is chosen, either party may initiate litigation, unless the parties agree to extend this period in writing. This clause ensures that disputes are first attempted to be resolved through mediation, potentially saving both parties time and money before resorting to litigation.