What is the deadline for resolving disputes through mediation with Creative World School before arbitration is required?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
21.01 Mediation. During the Term, certain disputes may arise between you and us that may be resolvable through mediation. To facilitate such resolution, you and we agree that each party must, before commencing any arbitration proceeding, submit the dispute for non-binding mediation at a mutually agreeable location (if you and we cannot agree on a location, the mediation will be conducted at our headquarters) to 1 mediator, appointed under the American Arbitration Association's Commercial Mediation Rules. The mediator will conduct a mediation in accordance with such rules. You and we agree that any statements made by either you or us in any such mediation proceeding will not be admissible in any subsequent arbitration or other legal proceeding. Each party will bear its own costs and expenses of conducting the mediation and share equally the costs of any third parties who are required to participate. Nevertheless, both you and we have the right in a proper case to obtain temporary restraining orders and temporary or preliminary injunctive relief from a court of competent jurisdiction. However, the parties must immediately and contemporaneously submit the dispute for non-binding mediation. If any dispute between the parties cannot be resolved through mediation within 60 days following the appointment of a mediator, the parties must submit the dispute to arbitration subject to the following terms and conditions.
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
According to Creative World School's 2025 Franchise Disclosure Document, if a dispute arises between the franchisee and franchisor, both parties must first attempt to resolve it through non-binding mediation before initiating any arbitration proceedings. This mediation must take place at a mutually agreed-upon location, or at Creative World School's headquarters if no agreement on location can be reached. A mediator will be appointed under the American Arbitration Association's Commercial Mediation Rules, and the mediation will be conducted according to these rules.
The document specifies that if the dispute cannot be resolved through mediation within 60 days following the appointment of a mediator, then the parties are obligated to submit the dispute to arbitration. Any statements made during the mediation process are inadmissible in subsequent arbitration or legal proceedings. Each party is responsible for their own costs and expenses related to the mediation, while the costs of any participating third parties will be shared equally between the franchisee and franchisor.
This clause ensures that Creative World School franchisees and the franchisor attempt to resolve disputes amicably through mediation before resorting to binding arbitration, which can be a more costly and time-consuming process. The 60-day deadline provides a structured timeframe for mediation, after which either party can proceed to arbitration if a resolution is not achieved. This is a fairly standard dispute resolution process in franchising, as it encourages initial attempts at collaboration before escalating to more formal and adversarial methods.