Are there any exceptions to the mediation requirement for disputes involving Face Foundrie?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Franchisee's respective rights to obtain injunctive or other equitable relief is in addition to any other right Franchisor or Franchisee may have under this Agreement. It will in no way limit or prohibit Franchisor from obtaining money damages from Franchisee if Franchisee breaches this Agreement.
18.02 Mediation. Except where it is necessary for either Franchisor or Franchisee 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 Franchisee 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 Franchisee to Franchisor, to the other, of Franchisee 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 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, there are specific exceptions to the mediation requirement before initiating legal action or arbitration. Face Foundrie or the franchisee can seek equitable relief to protect their respective business goodwill without first engaging in mediation. This includes enforcing obligations upon termination of the Franchise Agreement and enforcing covenants not to compete.
Specifically, Face Foundrie or the franchisee can pursue injunctive relief without first mediating the dispute. However, if either party initiates litigation or arbitration without complying with the obligation to mediate, the court or arbitrator may dismiss the case without prejudice. The party that failed to mediate may also be responsible for covering the other party's reasonable attorney's fees and costs.
These stipulations encourage both Face Foundrie and its franchisees to attempt mediation for dispute resolution, except in situations where immediate legal action is necessary to protect business interests. This approach is fairly typical in franchising, as it aims to reduce legal costs and preserve the business relationship while still allowing for swift action when critical interests are at stake.