What specific procedures are used by the American Arbitration Association for mediation of Gokhale Method franchise disputes?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
Except as otherwise provided herein, if a dispute arises between the parties, whether relating to this Agreement or not, the parties must first try in good faith to settle the dispute by mediation administered by the American Arbitration Association ("AAA") under its Commercial Mediation Procedures.
Only if a party fails or refuses to acknowledge its obligation to mediate after 15 days' written notice, or after a mediator has certified in writing that, following mediation, the dispute is not resolved, may the parties proceed to arbitration.
The mediation shall take place at a mutually agreed location, or, if the parties cannot agree to a location, in Palo Alto, California.
The parties shall each bear all of their own costs of mediation; provided, however, the fees of the mediator shall be divided equally between the parties.
The parties hereto agree that mediation shall not be required with respect to any claim or dispute involving: (a) any payment obligation of yours that is more than forty five (45) days past due; (b) actual or threatened disclosure or misuse of our Confidential Information; (c) the ownership, validity, or use of the Marks or ownership of Intellectual Property (d) enforcement the covenants set forth in Section 17 of this Agreement.
If a party fails to respond to a written request for mediation within fifteen (15) days after service or fails to participate in any scheduled mediation conference, that party shall be deemed to have waived its right to mediate the issue in dispute.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, disputes between Gokhale Method and its franchisees must first be mediated through the American Arbitration Association (AAA) under its Commercial Mediation Procedures. This means that before either party can pursue arbitration or legal action, they must attempt to resolve the issue through mediation facilitated by the AAA.
The mediation is set to occur at a mutually agreed location, but if an agreement cannot be reached, the default location is Palo Alto, California. Both parties are responsible for covering their own mediation costs; however, the fees for the mediator are to be split equally between Gokhale Method and the franchisee. This cost-sharing arrangement is typical in franchise agreements, as it ensures both parties have a vested interest in efficiently resolving the dispute.
However, mediation is not required for certain types of claims. These include disputes involving the franchisee's payment obligations that are more than 45 days past due, any actual or threatened disclosure or misuse of Gokhale Method's confidential information, issues related to the ownership, validity, or use of Gokhale Method's trademarks or intellectual property, and enforcement of non-compete covenants outlined in the agreement. If a party fails to respond to a mediation request within 15 days or does not participate in scheduled mediation, they waive their right to mediate the dispute. If mediation does not resolve the dispute, the matter can then proceed to arbitration under the AAA's Commercial Arbitration Rules, also to take place in Palo Alto, California.