Is good faith participation in mediation a precondition to initiating arbitration or legal action against Kitchen Solvers?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
- Mediation. The parties have reached this Agreement in good faith and in belief that it is advantageous to each of them. In recognition of the enormous strain on time, unnecessary expense and wasted resources potentially associated with litigation and/or arbitration, and in the spirit of cooperation, the parties pledge to try to resolve any dispute amicably, without litigation or arbitration. Other than an action by us under Section 13.A.3 or 13.B of this Agreement, before beginning any legal action or arbitration, the parties agree to mediate any dispute, controversy or claim between you and/or any of your owners, affiliates, officers, directors, shareholders, guarantors, employees, owners or members (each a "Franchisee Related Party"), on the one hand, and us, and/or any of our affiliates, officers, directors, shareholders, members, guarantors, employees, representatives, independent contractors or owners (each a "Franchisor Related Party"), on the other hand, including, without limitation, in connection with any dispute, controversy or claim arising under, out of, in connection with or in relation to: (a) this Agreement; (b) any lease or sublease for your Franchised Business; (c) any loan or other finance arrangement between us and our affiliates and you; (d) the parties' relationship; (e) events occurring prior to the entry into this Agreement; (f) the Business; or (g) any System standard, in accordance with the procedures set forth in this Section 13.A.1, inclusive of all subparts. Good faith participation in these procedures to the greatest extent reasonably possible, despite lack of cooperation by one or more of the other parties, is a precondition to initiating any arbitration or legal action, including any action to interpret or enforce this Agreement. The Mediation shall be conducted in accordance with the following provisions:
Source: Item 22 — Contracts (FDD page 49)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, franchisees are required to participate in mediation in good faith before starting arbitration or any legal action against Kitchen Solvers. This precondition applies to disputes between the franchisee (and related parties) and Kitchen Solvers (and related parties). These disputes can arise from the Franchise Agreement itself, leases, financial arrangements, the franchisee-franchisor relationship, events before the agreement, the Kitchen Solvers business, or any System standard. The FDD emphasizes that this good faith participation must occur to the greatest extent reasonably possible, even if other parties are not cooperative.
The mediation process, as outlined in the FDD, begins with the party seeking mediation (the Initiating Party) sending a written Dispute Notice to the other party. This notice must detail the nature of the dispute, the Initiating Party's version of the facts, the damages claimed, and any injunctive or other relief sought. It must also identify individuals authorized to settle the dispute for the Initiating Party. After receiving the Dispute Notice, both parties are expected to try to resolve the dispute in good faith through direct negotiations. If they cannot resolve the issues within 20 days of the Dispute Notice, either party can initiate a formal mediation procedure through the American Arbitration Association (AAA), following its Commercial Mediation Procedures. Unless the parties agree otherwise, the mediation will occur in La Crosse, Wisconsin, where Kitchen Solvers' headquarters are located.
The FDD also specifies the process for selecting a mediator. If the parties cannot agree on a mediator, they will exchange lists of acceptable mediators who are not associated with either party, ranking them in order of preference. The mediator with the highest ranking common to both lists will be selected. The mediator will then designate a mutually acceptable time and place for the mediation in La Crosse, Wisconsin, ideally within 30 days of their selection. To prepare for the mediation, both parties must attempt to agree on procedures for exchanging necessary information, with the mediator's help if needed. At least seven days before the first mediation session, each party must provide the mediator and the other party with a concise summary of their views on the dispute.
However, the FDD outlines exceptions where mediation and arbitration are not required. These exceptions include allegations that a franchisee has violated provisions related to the use of Kitchen Solvers' trademarks, the System, or confidential information, as well as violations of intellectual property rights or restrictive covenants, including confidentiality and non-competition agreements. Additionally, claims to collect past due amounts owed to Kitchen Solvers or its affiliates are also exempt from mandatory mediation or arbitration. This means that Kitchen Solvers can pursue legal action or other remedies directly in these specific cases without first engaging in mediation.