Is good faith participation in mediation a precondition to instituting any arbitration or legal action for Kitchen Solvers?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
8.1.1 The parties have reached this Agreement in good faith and with the belief that it is advantageous to each of them. In recognition of the 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 brought by us under Section 8.3 of this Agreement, and with the exception of injunctive relief or specific performance actions, before the filing of any arbitration, you and we agree to mediate any dispute, controversy or claim between us and/or any of our affiliates, officers, directors, managers, shareholders, members, owners, guarantors, employees or agents (each a "Franchisor Related Party"), on the one hand, and you and/or any of your affiliates, officers, directors, managers, shareholders, members, owners, guarantors, employees or agents (each a "Developer Related Party"), 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) the parties' relationship; or (c) the events occurring prior to the entry into this Agreement. 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 instituting any arbitration or legal action, including any action to interpret or enforce this Agreement.
Source: Item 23 — Receipts (FDD pages 49–190)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, with the exception of actions brought by Kitchen Solvers under Section 8.3 of the agreement or actions seeking injunctive relief or specific performance, both Kitchen Solvers and the franchisee must participate in mediation before starting any arbitration or legal action. This mediation applies to any dispute, controversy, or claim between them, including those related to the franchise agreement, their relationship, or events before the agreement.
This requirement means that a Kitchen Solvers franchisee must first attempt to resolve disputes through mediation before pursuing more formal legal avenues like arbitration or lawsuits. The FDD emphasizes that good faith participation in mediation is essential, even if the other party is uncooperative. This process is designed to encourage amicable resolutions and potentially save both parties time and resources associated with litigation.
However, there are exceptions where Kitchen Solvers can bypass mediation, such as actions for injunctive relief, specific performance, or claims relating to the franchisee's failure to pay fees, comply with confidentiality and noncompetition covenants, or misuse Kitchen Solvers' trademarks and system. These exceptions allow Kitchen Solvers to act quickly to protect its interests without being delayed by the mediation requirement.
For a prospective franchisee, this clause highlights the importance of attempting to resolve conflicts through mediation. Understanding the exceptions is also crucial, as they define situations where Kitchen Solvers may take immediate legal action. Franchisees should be prepared to engage in good-faith mediation and understand their rights and obligations under this dispute resolution process.