Prior to commencing arbitration, what internal mediation is required between Degree Wellness and the franchisee?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Except insofar as we elect to enforce this Agreement or to seek temporary or permanent injunctive relief as provided in Section 17.8 of this Agreement, before either party commences an arbitration under this Section, the parties agree that, as a condition precedent to the filing or commencement of any arbitration, they will attempt to resolve any dispute through internal mediation between the parties to be conducted in a mutually agreeable location or, if no such location is agreed upon within 10 days after a request for mediation, then at our corporate headquarters.
In the event that no settlement or resolution between the parties can be reached through internal mediation within thirty (30) days following the date on which a written request for internal mediation is made by any party, such dispute shall be submitted for arbitration pursuant to this Section. "Internal mediation" shall consist of, among other things, the parties having reasonable business discussions, whether by telephone or in person, concerning the dispute and means of resolving the same.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, before either party can start arbitration, they must first attempt to resolve the dispute through internal mediation. This is a condition that must be met before filing for arbitration, unless Degree Wellness seeks to enforce the agreement or pursue injunctive relief. The internal mediation should occur at a mutually agreed-upon location, or if no location is agreed upon within 10 days of a mediation request, it will take place at Degree Wellness's corporate headquarters.
The internal mediation process requires the parties to engage in reasonable business discussions, either by telephone or in person, to discuss the dispute and explore ways to resolve it. This mediation period lasts for 30 days from the date a written request for internal mediation is made. If a settlement or resolution cannot be reached within this 30-day period, either party can then proceed to submit the dispute for arbitration.
This requirement for internal mediation before arbitration is a fairly common practice in franchising, intended to encourage parties to resolve disputes amicably and efficiently without resorting to more formal and costly arbitration proceedings. For a prospective Degree Wellness franchisee, this means understanding the importance of attempting to resolve issues directly with Degree Wellness through open communication and negotiation before pursuing arbitration. It also highlights the need to document all communications and efforts made during the internal mediation process, as this could be relevant if the dispute eventually proceeds to arbitration.