Under what circumstances can the parties proceed to arbitration in a Gokhale Method dispute?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
- 24.3. Arbitration. Except as otherwise provided in this section, all disputes between the parties shall, if not resolved by mediation, be resolved in arbitration before the American Arbitration Association ("AAA") under its Commercial Arbitration Rules. Such arbitration shall take place before a sole arbitrator in Palo Alto, California.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, disputes between Gokhale Method and a franchisee must first undergo mediation administered by the American Arbitration Association (AAA). Arbitration can only occur if mediation fails. Specifically, arbitration is allowed if a party either fails or refuses to acknowledge their obligation to participate in mediation after receiving 15 days' written notice, or if the mediator certifies in writing that the dispute remains unresolved after the mediation process.
However, mediation is not required for certain types of claims or disputes. These exceptions 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 concerning the ownership, validity, or use of Gokhale Method's Marks or intellectual property, and enforcement of the covenants outlined in Section 17 of the agreement. In these specific cases, the parties may proceed directly to arbitration without first attempting mediation.
If a party does not respond to a written request for mediation within 15 days or fails to participate in any scheduled mediation conference, they will be considered to have waived their right to mediate the issue. In general, all disputes that are not resolved through mediation will be settled through arbitration handled by the American Arbitration Association (AAA) under its Commercial Arbitration Rules. The arbitration will take place before a single arbitrator in Palo Alto, California, and the costs of arbitration, excluding the arbitrator's fees, will be borne individually by each party, while the arbitrator's fees will be split equally between the parties.