Who bears the costs of mediation for a Crepe De Licious dispute?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
arising from a violation of any provision of this Agreement other than the Royalty Fee and Advertisement Fund sections. You and each of your owners agree that the liquidated damages provision does not give us an adequate remedy at law for any default under, or for the enforcement of, any provision of this Agreement other than the Royalty Fee and Advertisement sections.
18. DISPUTE RESOLUTION
18.01 Mediation. Except as set forth in Section 18.03 below, all claims or disputes between you and us or our affiliates arising out of, or in any way relating to, this Agreement, or any of the parties' respective rights and obligations arising out of this Agreement, shall be submitted first to mediation prior to a hearing in binding arbitration or a trial court proceeding. Such mediation shall take place in Toronto, Ontario, Canada (or our then-current headquarters) under the auspices of the ADR Institute of Canada ("ADR"), in accordance with ADR's Commercial Mediation Rules then in effect. You may not commence any action against us or our affiliates with respect to any such claim or dispute in any court unless mediation proceedings have been terminated either: (i) as the result of a written declaration of the mediator(s) that further mediation efforts are not worthwhile; or (ii) as a result of a written declaration by us. The parties shall each bear their own costs of mediation and shall share equally the filing fee imposed by ADR and the mediator's fees. We reserve the right to specifically enforce our right to mediation. Prior to mediation, and before commencing any legal action against us or our affiliates with respect to any such claim or dispute, you must submit a notice to us, which specifies in detail, the precise nature and grounds of such claim or dispute. We shall not be required to first attempt to mediate or arbitrate a controversy, dispute or claim against you through mediation or arbitration as set forth in Section 18 if such controversy, dispute or claim concerns an allegation by us that you have violated (or threaten to violate, or pose an imminent risk of violating): (a) any of our federally protected intellectual property rights in the Marks, the System, or in any of our trade secrets or confidential information; (b) any claims pertaining to or arising out of any warranty issued;
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, in the event of mediation, the franchisee and Crepe De Licious each bear their own costs. They will equally share the filing fees imposed by the ADR Institute of Canada and the mediator's fees. This applies to claims or disputes arising from the Franchise Agreement or the parties' rights and obligations. The mediation takes place in Toronto, Ontario, Canada, under the auspices of the ADR Institute of Canada, following its Commercial Mediation Rules.
This cost-sharing arrangement is a fairly standard practice in franchising. It ensures that neither party is unduly burdened by the costs of attempting to resolve a dispute through mediation. However, it's important to note that this applies specifically to mediation. If the dispute proceeds to arbitration or court, the allocation of costs, including attorney's fees, may be different and will be determined by the arbitrator or court, potentially based on who prevails in the legal action.
There are exceptions to the mediation requirement. Crepe De Licious is not required to mediate or arbitrate claims against a franchisee if the dispute involves violations (or threatened violations) of their federally protected intellectual property rights, warranty claims, or restrictive covenants. This means Crepe De Licious can immediately pursue legal action in these cases without first attempting mediation. The mediation provision applies during the term of the Franchise Agreement and even after its termination, expiration, or non-renewal.
Prospective franchisees should be aware of these dispute resolution procedures and cost implications. Understanding the process and potential costs associated with mediation and other forms of dispute resolution is crucial for making an informed investment decision. Franchisees should also note the specific location for mediation (Toronto) and the governing rules (ADR Institute of Canada), as these factors can influence the overall cost and convenience of the process.