Who bears the costs of mediation for Kidokinetics franchise disputes in California?

According to Kidokinetics's 2024 Franchise Disclosure Document, the costs of mediation for franchise disputes in California are shared between the parties. Specifically, each party is responsible for their own costs, while the filing fee and the mediator's fees are split equally. This arrangement means that a Kidokinetics franchisee in California would need to budget for their own legal and related expenses, plus half of the costs associated with the mediator.

This cost-sharing arrangement is a fairly common practice in franchise mediation. It encourages both Kidokinetics and the franchisee to approach the mediation process seriously, as both parties have a financial stake in reaching a resolution. It also prevents either party from being financially burdened by the entire cost of the mediation process, which could be substantial depending on the complexity and length of the mediation.

However, the FDD also notes that the Franchise Agreement requires binding arbitration in Florida, with costs awarded to the prevailing party. It advises prospective franchisees to seek legal counsel to determine the applicability of California and federal laws regarding venue restrictions to forums outside of California. This suggests that while mediation costs are shared, arbitration costs could potentially fall entirely on the losing party, and the location of arbitration may be outside of California, which could increase expenses for a California-based franchisee.