Are there any exceptions to the mediation requirement for disputes related to the Jersey Mikes agreement?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
LAR LAW, RULE, OR REGULATION OF THE STATE OF NEW JERSEY TO WHICH IT WOULD NOT OTHERWISE BE SUBJECT**.**
- 27.2 EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, ANY CLAIM OR CONTROVERSY ARISING OUT OF OR R ELATED TO THIS AGREEMENT, OR THE MAKING, PERFORMANCE, BREACH, OR INTERPRETATION OF THIS AGREEMENT, EXCEPT FOR ANY ACTIONS BROUGHT WITH RESPECT TO: I) OWNERSHIP OR USE OF THE MARKS; II) SECURING INJUNCTIVE RELIEF PURSUANT TO SECTION 27.6; III) ANY COVENANT LISTED WITHIN SECTION 16 OR CONDITIONS WITHIN SECTION 17 OF THIS AGREEMENT; IV) THE RIGHT TO INDEMNIFICATION OR THE MANNER IN WHICH IT IS EXERCISED; SHALL FIRST BE THE SUBJECT OF AN INFORMAL MEETING BETWEEN THE PARTIES TO RESOLVE THE DISPUTE AND THEN SUBJECT TO NON-BINDING MEDIATION. THE PARTIES AGREE TO CONDUCT THE MEDIATION IN ACCORDANCE WITH THE THEN CURRENT COMMERCIAL MEDIATION PROCEDURES OF THE AMERICAN ARBITRATION ASSOCIATION (THE "AAA"), EXCEPT TO THE EXTENT THE RULES CONFLICT WITH THIS AGREEMENT, IN WHICH CASE THIS AGREEMENT SHALL CONTROL. HOWEVER, THE MEDIATION NEED NOT BE ADMINISTERED BY THE AAA UNLESS THE PARTIES CANNOT AGREE UPON THE SELECTION OF A MEDIATOR WITHIN THIRTY (30) DAYS OF THE RECEIPT OF THE WRITTEN NOTICE OF MEDIATION. IF THE PARTIES CANNOT REACH AGREEMENT UPON THE SELECTION OF A MEDIATOR, EITHER PARTY MAY COMMENCE A M EDIATION PROCEEDING BY M AKING A R EQUEST FOR MEDIATION TO THE AAA REGIONAL OFFICE CLOSEST TO MONMOUTH COUNTY, NEW JERSEY, WITH A C OPY TO THE OTHER PARTY. T HE WRITTEN REQUEST FOR MEDIATION SHALL DESCRIBE WITH SPECIFICITY THE NATURE OF THE DISPUTE AND THE RELIEF SOUGHT. BOTH PARTIES ARE OBLIGATED TO ENGAGE IN THE MEDIATION.
THE MEDIATION WILL BE CONDUCTED BY A SINGLE MEDIATOR WITH NO PAST OR PRESENT AFFILIATION OR CONFLICT WITH ANY PARTY TO THE MEDIATION. THE PARTIES AGREE THAT THE MEDIATOR SHALL BE DISQUALIFIED AS A WITNESS, EXPERT, CONSULTANT OR ATTORNEY IN ANY PENDING OR SUBSEQUENT PROCEEDING RELATING TO THE DISPUTE WHICH IS THE SUBJECT OF THE MEDIATION. IN THE EVENT
THE PARTIES CANNOT AGREE ON A ME DIATOR AND THE AAA ADMINISTERS THE MEDIATION, THE AAA SHALL PROVIDE THE PARTIES WITH A L IST OF MEDIATORS WILLING TO SERVE. THE PARTIES WILL HAVE TEN (10) DAYS FROM RECEIPT OF THE LIST FROM THE AAA TO AGREE UPON A MEDIATOR FROM THE LIST. IF NEITHER PARTY ADVISES THE AAA IN WRITING OF AN AGREEMENT WITHIN TEN (10) DAYS OF RECEIPT OF SUCH LIST, THE AAA SHALL APPOINT THE MEDIATOR.
THE FEES AND EXPENSES OF THE AAA (OR O THER ADMINISTRATOR), IF APPLICABLE, AND THE MEDIATOR'S FEE, SHAL L BE SHA RED EQUALLY AMONG THE PARTIES. EACH PARTY SHALL BEAR ITS OWN ATTORNEYS' FEES AND OTHER COSTS INCURRED IN CONNECTION WITH THE MEDIATION IRRESPECTIVE OF THE OUTCOME OF THE MEDIATION OR TH E MEDIATOR'S EVALUATION OF EACH PARTY'S CASE. T HE MEDIATION SHALL OCCUR WITHIN THIRTY (30) DAYS AFTER SELECTION OF THE MEDIATOR.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mikes's 2025 Franchise Disclosure Document, while mediation is generally required for claims or controversies, there are specific exceptions. Actions pertaining to the ownership or use of Jersey Mikes's marks, securing injunctive relief, covenants listed within Section 16 or conditions within Section 17 of the agreement, and the right to indemnification are not subject to the mediation requirement. This means Jersey Mikes can pursue legal action related to these issues without first engaging in mediation.
For a prospective franchisee, this means that certain types of disputes, particularly those concerning Jersey Mikes's intellectual property or the need for immediate legal remedies, can bypass the mediation process. However, most other disputes arising from the franchise agreement will require an initial informal meeting and then non-binding mediation. This mediation is to be conducted following the American Arbitration Association's commercial mediation procedures, unless those rules conflict with the agreement itself.
The mediation process involves selecting a mediator, preferably agreed upon by both parties, within 30 days of a written notice of mediation. If an agreement on the mediator cannot be reached, the American Arbitration Association will appoint one. The mediation will take place in Monmouth County, New Jersey, and both parties are obligated to participate. It is important to note that neither initiating nor completing mediation is a prerequisite for starting other legal actions, including arbitration, and mediation does not prevent Jersey Mikes from exercising any termination rights under the agreement.
This mediation and arbitration clause is typical in franchise agreements, as it attempts to provide a structured way to resolve disputes while also protecting the franchisor's key interests and rights. Franchisees should understand which types of disputes are subject to mediation and which can proceed directly to legal action, as this can affect the speed and cost of resolving disagreements.