Under what circumstances can the parties waive mediation and proceed directly to arbitration for a Dryject franchise?
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, both parties must agree to waive mediation and proceed directly to arbitration. If negotiation and mediation do not resolve the claim, controversy, or dispute, or if the issue arises after the termination or expiration of the agreement, the matter will be referred to arbitration. Dryject emphasizes that both parties should make a diligent effort to resolve issues through negotiation and mediation before resorting to arbitration.
This means that a Dryject franchisee has the opportunity to attempt to resolve disputes through less formal and potentially less costly methods before entering into arbitration. However, if both Dryject and the franchisee agree, they can bypass mediation altogether. This could be beneficial if both parties believe mediation would be unproductive or if there is a need for a quicker resolution.
It is important for a prospective Dryject franchisee to understand the dispute resolution process outlined in the franchise agreement. While the agreement encourages initial attempts at negotiation and mediation, it also provides the option to waive mediation and proceed directly to arbitration if both parties agree. Franchisees should consider the potential costs and benefits of each approach when deciding how to resolve disputes with Dryject.