Under whose auspices must mediation occur for a claim against Craters & Freighters?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Each party will bear its own cost of mediation and Franchisor and Franchisee will share mediator fees equally.
Each party will use best efforts to resolve the dispute involving the Claim through mediation.
The parties hereto will have sixty (60) days to reach a settlement; such sixty (60) day period will begin on the date that Franchisee has submitted such claim to the AAA.
Notwithstanding the foregoing, for the sake of clarity, any controversy, dispute, or claim concerning the following will not be required to be submitted to mediation: (i) any federally protected intellectual property rights in the Marks, the System, or in any Trade Secrets, Confidential Information, or other confidential information; (ii) any of the restrictive covenants contained in this Agreement; and (iii) any of Franchisee's payment obligations under this Agreement.
- 23.3 Arbitration.
In the event any dispute involving a Claim is not resolved through mediation within the sixty (60) day period referenced in Section 23.2 above, Franchisee must submit such Claim to arbitration in Jefferson County or Denver County, State of Colorado, in accordance with the Commercial Arbitration Rules of the American Arbitration Association and judgment upon the award may be entered in any court having jurisdiction thereof.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, if a dispute arises that requires mediation, the initial claim must be submitted to the AAA (American Arbitration Association). Following this submission, both parties have 60 days to attempt to reach a settlement through mediation. Each party is responsible for covering their own mediation costs, while the fees for the mediator will be split equally between Craters & Freighters and the franchisee.
However, it's important to note that certain types of disputes are excluded from this mediation requirement. These include issues related to federally protected intellectual property rights in the Marks, the System, or any Trade Secrets, Confidential Information, or other confidential information, restrictive covenants within the agreement, and the franchisee's payment obligations. These specific issues do not need to be submitted to mediation before other resolution methods are pursued.
If the mediation process does not result in a resolution within the 60-day timeframe, the franchisee is then obligated to submit the claim to arbitration. This arbitration must take place in either Jefferson County or Denver County, Colorado, following the Commercial Arbitration Rules of the American Arbitration Association. The decision reached through arbitration can then be enforced in any court that has the appropriate jurisdiction.
This process ensures that Craters & Freighters franchisees have a structured method for resolving disputes, initially through mediation and then, if necessary, through arbitration. However, franchisees should be aware of the specific exceptions that bypass the mediation requirement, as well as the location and rules governing the arbitration process.