According to the Ella Cafe FDD, what is the purpose of mediation?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
If agreement cannot be reached within 15 days after either party has notified the other of its desire to seek mediation, then mediation will occur with the American Arbitration Association or any successor organization ("AAA") in accordance with its rules governing mediation.
Mediation will be held at the offices of the AAA in the city where Franchisor's principal business office is located at the time of the mediation.
The costs and expenses of mediation paid to the AAA or to the mediator will be paid equally by the parties.
All other mediation-related expenses, including but not limited to, attorneys' fees and travel expenses, will be paid by the party which incurred such expense.
- 14.2.3.
If the parties are unable to resolve the claim, controversy, or dispute within 90 days after the mediator has been chosen, then, unless such time period is extended by written agreement of the parties, either party may institute legal proceedings pursuant to Section 14.3.
The parties agree that statements made during such mediation proceeding will not be admissible for any purpose in any subsequent legal proceeding.
- 14.2.4.
Notwithstanding the foregoing provisions of this Section 14.2., the parties' agreement to mediate will not apply to controversies, disputes, or claims relating to or based on past due amounts owed to Franchisor pursuant to this Agreement, the Marks, Copyrighted Works, or Franchisor's Confidential Information.
Moreover, regardless of this mediation agreement, Franchisor and Developer each have the right in a proper case to seek temporary restraining orders and temporary or preliminary injunctive relief in any court of competent jurisdiction.
- 14.2.5.
Neither illness, Covid, inconvenience, weather, or any other reason shall serve to excuse your personal appearance for mediation.
- 14.2.5.
The parties acknowledge that any information disclosed by either party in mediation may only be used for those purposes and may not be used in any following litigation.
Mediation must be conducted in person pursuant to Section 14.2.2., and no telephonic or electronic appearance by any of the parties or their counsel is permitted except for the purposes of scheduling mediation or discussion non-material mediation-related matters.
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, mediation is a process intended to resolve claims, controversies, or disputes between the franchisor and the developer (franchisee). If an agreement cannot be reached within 15 days of either party expressing a desire for mediation, the process will proceed under the rules of the American Arbitration Association (AAA). The mediation will take place at the AAA office located in the same city as Ella Cafe's principal business office. Both parties will equally share the costs and expenses paid to the AAA or the mediator, while each party is responsible for their own additional expenses, such as attorney's fees and travel costs.
If the parties cannot resolve the issue within 90 days after the mediator is chosen, either party may initiate legal proceedings, unless both parties agree to extend this period in writing. Statements made during the mediation are inadmissible in any subsequent legal proceedings. However, the agreement to mediate does not apply to disputes regarding past due amounts owed to Ella Cafe, or those relating to the Marks, Copyrighted Works, or Confidential Information.
Ella Cafe and the developer retain the right to seek temporary restraining orders and injunctive relief in court, regardless of the mediation agreement. Personal appearance for mediation is mandatory, and cannot be excused due to illness, COVID, inconvenience, weather, or any other reason. Information disclosed during mediation can only be used for the purposes of the mediation itself and cannot be used in later litigation. Mediation must be conducted in person, with no telephonic or electronic appearances allowed, except for scheduling or discussing non-material matters related to the mediation.