Under what circumstances is mediation required before initiating legal action or arbitration against Face Foundrie?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
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. If the party receiving the notice of intent to mediate does not name such an organization within ten (10) days from the date the notice of intention to mediate is received, then the other party may proceed as if this Section 18.02 did not exist, or, at its option, make the selection of the organization to provide mediation services. If Franchisee or Franchisor selects an organization that is unwilling to serve as mediator, then the other party may select the organization. Once the organization is designated and agrees to accept the appointment as mediator, the organization will be directed to schedule a mediation proceeding at a time mutually convenient to Franchisee and Franchisor. The mediation will be held within thirty (30) days following receipt by the mediation organization of notification that its services are requested. If Franchisee and Franchisor cannot agree on a date for mediation, then the mediation organization will select a date it believes is reasonable for both parties, given all of the claimed conflicts in dates. The person actually mediating the dispute will be required to have at least ten (10) years of experience as either a franchisee or franchisor (or as an officer of such an entity) or in franchise law. Franchisor and Franchisee will equally share the cost of the mediator. The mediator will select the location for the mediation, but unless Franchisor and Franchisee agree otherwise, the mediation will be held in a metropolitan area within twenty (20) miles of Franchisor's principal office.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, mediation is generally required before initiating legal action or arbitration against Face Foundrie. However, there is an exception: if either Face Foundrie or the franchisee needs to obtain equitable relief to preserve the goodwill of their respective businesses, such as enforcing obligations upon termination of the Franchise Agreement or enforcing covenants not to compete, they are not required to enter into mediation before initiating legal action or arbitration.
The mediation process involves a written notice from either the franchisee or Face Foundrie to the other party expressing a desire to mediate. The recipient of the notice then has ten days to select an independent entity that provides mediation services. If they fail to do so, the other party can either proceed as if mediation is not required or select the mediation service themselves. The selected organization will then schedule a mediation proceeding at a mutually convenient time, to be held within thirty days of the request.
The mediator must have at least ten years of experience as a franchisee, franchisor, or in franchise law. The costs of the mediator are shared equally between Face Foundrie and the franchisee. Unless otherwise agreed, the mediation will take place in a metropolitan area within twenty miles of Face Foundrie's principal office. The mediation must last for a minimum of four hours before any legal action or arbitration can be initiated.