If the franchisee and Crave Cookies Franchising agree not to participate in mediation, what is the next step?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee and Crave Cookies Franchising agree not to participate in mediation, then the matter may proceed to a legal suit as provided below.
- (iii) Legal Proceeding.
If the mediation has not resolved the matter successfully, or mediation is waived, either Franchisee or Crave Cookies Franchising may institute a legal suit, action, or proceeding, exclusively in the city and state of Crave Cookies Franchising's then-current headquarters, against the other party to enforce this Agreement or obtain any other remedy regarding any breach of this Agreement.
The prevailing party in the suit, action, or proceeding is entitled to receive, and the non-prevailing party shall pay, in addition to all other remedies to which the prevailing party may be entitled, the costs and expenses incurred by the prevailing party in conducting the suit, action, or proceeding, including attorneys' fees and expenses and court costs, even if not recoverable by law, including, but not limited to, all fees, taxes, costs, and expenses incident to appellate and post-judgment proceedings.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, if both the franchisee and Crave Cookies Franchising agree to waive mediation, either party may proceed to institute a legal suit, action, or proceeding. This legal action must be filed exclusively in the city and state where Crave Cookies Franchising's headquarters is located at that time.
This means that a franchisee who has a dispute with Crave Cookies can bypass mediation if both parties agree and immediately pursue legal action. However, the franchisee must file this suit in the specific jurisdiction where Crave Cookies's headquarters is located. This could potentially create additional expenses for the franchisee if they are located far from the headquarters, as they would need to travel or hire local counsel.
The FDD also specifies that the prevailing party in any such legal proceeding is entitled to receive costs and expenses, including attorney's fees and court costs, from the non-prevailing party. This could incentivize both parties to carefully consider their positions before initiating a lawsuit, as the financial consequences of losing could be significant. Franchisees should be aware of this clause and factor it into their decision-making process when considering legal action against Crave Cookies.
It's important to note that this clause does not force franchisees into mediation. It only requires it if one party requests it. If both parties agree to waive mediation, the franchisee can proceed directly to a lawsuit. This is different from some franchise agreements that mandate mediation or arbitration before a lawsuit can be filed.