What is the dependency between mediation and litigation for Ella Cafe?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
To the extent that litigation is permitted in accordance with the above provisions, or in the event that any claim or controversy is not finally resolved through mediation, then the following provisions will apply:
- (a) **JURISDICTION AND VENUE.
FOR ANY CLAIMS, CONTROVERSIES, AND/OR DISPUTES WHICH ARE NOT FINALLY RESOLVED THROUGH MEDIATION AS PROVIDED ABOVE, FRANCHISEE, OWNERS, AND PRINCIPALS IRREVOCABLY SUBMIT THEMSELVES TO THE JURISDICTION OF THE STATE AND THE FEDERAL DISTRICT COURTS LOCATED IN THE STATE, COUNTY, OR JUDICIAL DISTRICT IN WHICH FRANCHISOR'S PRINCIPAL PLACE OF BUSINESS IS LOCATED.
FRANCHISEE, OWNERS, AND PRINCIPALS HEREBY WAIVE ALL QUESTIONS OF PERSONAL JURISDICTION
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, litigation is only permitted after mediation has been attempted but failed to resolve a claim or controversy. Specifically, if mediation does not result in a resolution within 90 days after the mediator is chosen, either party may then initiate legal proceedings. This 90-day period can be extended if both parties agree in writing.
However, there are exceptions to this mediation requirement. Disputes relating to past due amounts owed to Ella Cafe, or those concerning the Marks, Copyrighted Works, or Ella Cafe's Confidential Information, are not subject to mandatory mediation. In these cases, Ella Cafe and the franchisee each have the right to seek temporary restraining orders and preliminary injunctive relief in court, regardless of the mediation agreement.
The FDD states that any information disclosed during mediation can only be used for mediation purposes and is not admissible in any subsequent legal proceedings. This encourages open communication during mediation without fear of it being used against a party later in court. Furthermore, personal appearance for mediation is mandatory, with no exceptions for illness, COVID, inconvenience, or weather, highlighting the importance Ella Cafe places on in-person dispute resolution efforts before resorting to litigation.
If litigation is permitted because mediation failed, franchisees, owners, and principals must submit to the jurisdiction of the state and federal district courts where Ella Cafe's principal place of business is located. They also waive all questions of personal jurisdiction.