Does the Mr. Sandless franchise agreement require mediation for dispute resolution?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
You must first bring any claim or dispute between you and us to our President and/or Chief Executive Officer. You must exhaust this internal dispute resolution procedure before you may bring your dispute before a third-party.
24.3 Mediation
At our option, all claims or disputes between you and us or our affiliates arising out of, or in any way relating to, this Agreement, or any of the parties' respective rights and obligations arising out of this Agreement, shall be submitted first to mediation in Delaware County, Pennsylvania under the auspices of the National Franchise Mediation Program ("NFMP"), in accordance with the NFMP's Commercial Mediation Rules then in effect. Before commencing any legal action against us or our affiliates with respect to any such claim or dispute, you must submit a notice to us which specifies, in detail, the precise nature and grounds of such claim or dispute. We will have a period of thirty (30) days following receipt of such notice within which to notify you as to whether we or our affiliates elect to exercise our option to submit such claim or dispute to mediation. You may not commence any action against us or our affiliates with respect to any such claim or dispute in any court unless we fail to exercise our option to submit such claim or dispute to mediation, or such mediation proceedings have been terminated either: (i) as the result of a written declaration of the mediator(s) that further mediation efforts are not worthwhile; or (ii) as a result of a written declaration by us. The parties shall each bear their own costs of mediation and shall share equally the filing fee imposed by NFMP and the mediator's fees. Our rights to mediation, as set forth herein, may be specifically enforced by us.
24.4 Third Party Beneficiaries
Our officers, directors, shareholders, agents and/or employees are express third party beneficiaries of this Agreement and the mediation provision contained herein, each having authority to specifically enforce the right to mediate claims asserted against such person(s) by you.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, the franchise agreement does not require mediation, but Mr. Sandless has the option to require mediation. Before a franchisee can commence any legal action against Mr. Sandless or its affiliates regarding any claim or dispute, the franchisee must first submit a detailed notice specifying the nature and grounds of the claim. Mr. Sandless then has 30 days to decide whether to submit the claim to mediation.
The mediation, if elected by Mr. Sandless, must occur in Delaware County, Pennsylvania, under the auspices of the National Franchise Mediation Program (NFMP) and follow the NFMP's Commercial Mediation Rules. A franchisee cannot start a lawsuit unless Mr. Sandless declines mediation or the mediation is terminated, either by the mediator's declaration that further efforts are not worthwhile or by Mr. Sandless's written declaration.
The franchisee and Mr. Sandless will each bear their own costs of mediation and share equally the filing fee imposed by NFMP and the mediator's fees. Mr. Sandless retains the right to specifically enforce the mediation provision. Furthermore, Mr. Sandless's officers, directors, shareholders, agents, and employees are considered third-party beneficiaries of the agreement and the mediation provision, allowing them to enforce the right to mediate claims asserted against them by the franchisee.
This means that a Mr. Sandless franchisee may be required to participate in mediation before pursuing legal action, but only at Mr. Sandless's discretion. The franchisee will need to factor in the time and costs associated with potential mediation when considering dispute resolution options. This clause aims to provide a structured, less adversarial approach to resolving disputes, potentially saving both parties time and money compared to litigation.