Can Dryject franchisees waive mediation and proceed directly to arbitration?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) If the dispute is not resolved pursuant to Subsection 37(a)(i), the parties shall submit the dispute to mediation with a mediator who has experience in franchise law and in accordance with the Commercial Arbitration Rules and Mediation Procedures (Including Procedures for Large, Complex Commercial Disputes) of the American Arbitration Association ("AAA") unless both parties agree to waive mediation and proceed directly to arbitration as set forth in Subsection 37(a)(iii).
Each party will bear their own costs and fees of the mediation, however, the mediator's fee will be split equally between the parties."
- (iii) If the parties have not resolved a claim, controversy or dispute by negotiation, mediation, or otherwise (which the parties will make a diligent effort to do) or if a claim, controversy or dispute arises subsequent to the termination or expiration of this Agreement, such claim, controversy or dispute shall be referred to Arbitration in accordance with the AAA's Commercial Arbitration Rules and Mediation Procedures (Including Procedures for Large, Complex Commercial Disputes), as amended (and specifically including the Optional Rules).
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, franchisees have the option to waive mediation and proceed directly to arbitration if both parties agree. The FDD outlines a multi-step dispute resolution process. Initially, both Dryject and the franchisee must attempt to resolve disputes through meetings or telephone conferences involving senior executives. If these efforts are unsuccessful, the parties are then expected to submit to mediation, using a mediator experienced in franchise law and following the American Arbitration Association (AAA) procedures.
However, the requirement for mediation can be bypassed if both Dryject and the franchisee mutually agree to waive it. In such cases, the dispute can be directly referred to arbitration. This arbitration will also be conducted in accordance with the AAA's Commercial Arbitration Rules and Mediation Procedures. This flexibility allows for a potentially faster resolution process if both parties believe mediation would be unproductive.
It's important to note that if negotiation and mediation do not resolve the issue, or if a dispute arises after the termination or expiration of the franchise agreement, arbitration becomes the required method of resolution. This clause ensures that all disputes related to the Dryject franchise are ultimately resolved through a structured and binding process, whether it involves mediation or proceeds directly to arbitration.