What rules govern the mediation process if negotiation fails for a Dryject franchise dispute?
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."
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to the 2025 Dryject Franchise Disclosure Document, if initial negotiations fail to resolve a dispute, the parties must submit to mediation. The mediator should have experience in franchise law, and the mediation will follow the Commercial Arbitration Rules and Mediation Procedures of the American Arbitration Association (AAA), including procedures for large, complex commercial disputes. However, both parties can agree to skip mediation and proceed directly to arbitration.
Each party is responsible for their own costs and fees associated with the mediation. The mediator's fee, however, will be split equally between Dryject and the franchisee. This arrangement ensures that neither party is unduly burdened by the cost of the mediator, promoting a fairer process.
If mediation does not resolve the dispute, the next step is arbitration, also conducted in accordance with the AAA's Commercial Arbitration Rules and Mediation Procedures. This multi-step approach—negotiation, then mediation, and finally arbitration—aims to provide multiple opportunities for resolution before resorting to litigation, potentially saving time and expenses for both Dryject and the franchisee.