Who bears the costs of mediation in a dispute with Extreme Art Studio in California?

According to Extreme Art Studio's 2024 Franchise Disclosure Document, the costs of mediation for a franchise purchased in California are shared between the parties. Specifically, each party is responsible for their own costs, while the filing fee and the mediator's fees are split equally. This arrangement is detailed in the California addendum to the franchise agreement.

This means that if a dispute arises that requires mediation, a franchisee in California will need to budget for their own legal or consulting costs, as well as half of the expenses associated with the mediator and the filing fee. This cost-sharing arrangement can help make mediation a more accessible and equitable process for resolving conflicts.

It is important to note that the franchise agreement also contains provisions requiring binding arbitration, with the costs being awarded to the prevailing party, and that the arbitration will occur in Minnesota. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws to any provisions of the Franchise Agreement restricting venue to a forum outside the State of California.