Is there a dependency between mediation and arbitration for Face Foundrie disputes?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
per will also be entitled to the entry of temporary restraining orders and temporary and permanent injunctions enforcing these provisions. If Franchisor is successful in obtaining an injunction, or any other judicial relief or order from an arbitrator against Area Developer, or in successfully defending any claim Area Developer has brought against Franchisor, Area Developer will pay Franchisor an amount equal to all of Franchisor's costs of prosecuting and defending the action, including reasonable attorneys' fees, costs of investigation, court and arbitration costs, and other litigation or arbitration expenses.
Franchisor and Area Developer's respective rights to obtain injunctive or other equitable relief is in addition to any other right Franchisor or Area Developer may have under this Agreement. It will in no way limit or prohibit Franchisor from obtaining money damages from Area Developer if Area Developer breaches this Agreement.
- 16.3 Mediation. Except where it is necessary for either Franchisor or Area Developer to obtain equitable relief to preserve the goodwill of their respective businesses (including, but not limited to, the enforcement of obligations upon termination of this Agreement and the covenants not to compete contained in this Agreement), Franchisor and Area Developer each agree to enter into mediation of all disputes involving this Agreement or any other aspect of the relationship between them, for a minimum of four (4) hours, before initiating any legal action or arbitration against the other. Upon written notice by either Area Developer to Franchisor, to the other, of Area Developer or Franchisor's desire to mediate, the party receiving the notice will select an independent entity that provides mediation services to serve as mediator in the proceeding.
Source: Item 23 — RECEIPTS (FDD pages 74–257)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, mediation is generally required before initiating arbitration or legal action. Before starting arbitration against Face Foundrie, the Area Developer must first attempt mediation for a minimum of four hours, except when seeking equitable relief to protect business goodwill.
If either party initiates litigation or arbitration without first attempting mediation, the court or arbitrator will dismiss the case without prejudice. The party that failed to mediate will also be responsible for covering the other party's legal fees and costs, regardless of the final outcome of the case.
Following these procedures helps ensure that disputes are first addressed through a less adversarial process, potentially saving both parties time and money. However, it's important to note the exceptions where immediate legal action or arbitration is permitted, such as actions to enforce non-compete agreements or protect goodwill. A prospective franchisee should carefully consider these dispute resolution steps and exceptions, as they can significantly impact how disagreements with Face Foundrie are handled.