Does the Endless Summer Sweets franchise agreement specify which party is responsible for the costs of arbitration?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
The Franchise Agreement requires mediation. The mediation will occur in Berkely, California, with the costs being borne equally by Franchisor and Franchisee. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Mediation Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
Source: Item 23 — RECEIPTS (FDD pages 39–125)
What This Means (2024 FDD)
According to the 2024 Endless Summer Sweets Franchise Disclosure Document, the Franchise Agreement requires mediation, not arbitration. The document specifies that mediation will occur in Berkely, California, and the costs associated with mediation will be equally shared between Endless Summer Sweets and the franchisee.
Prospective franchisees should note that while the FDD specifies cost-sharing for mediation, it does not address the allocation of costs for arbitration. Given this lack of clarity, it is important for potential franchisees to seek legal counsel to fully understand their rights and obligations regarding dispute resolution.
It would be prudent for a prospective Endless Summer Sweets franchisee to discuss with the franchisor how arbitration costs, if applicable, would be handled to avoid potential financial surprises should a dispute arise that proceeds to arbitration instead of mediation.