Within how many days of the AAA's designation must Mrcool mediation be conducted?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) Non-Binding Mediation – Franchisee and Franchisor agree that before either party may bring any action, dispute and/or controversy arising from or related to this Agreement and/or the franchise relationship between Franchisor and Franchisee in arbitration, the parties must first mediate the dispute through non-binding mediation. Mediation shall be non-binding and shall be conducted by the American Arbitration Association ("AAA") in accordance with the AAA's then current rules for the mediation of commercial disputes. All mediation proceedings shall be conducted in Graves County, Kentucky or, if a mediator is not available in Graves County, Kentucky then at a suitable location selected by the mediator that is located closest to Graves County, Kentucky. Mediation shall be conducted by one mediator and if Franchisor and Franchisee cannot agree on a mediator then the mediator shall be selected by the AAA. Mediation shall be conducted within 45 days of the AAA's designation and/or acknowledgment of the selected mediator or such longer period as may be agreed to between Franchisor and Franchisee in writing and signed by each respective party. Franchisor and Franchisee shall each be responsible for their own costs associated with mediation and Franchisor and Franchisee shall each be responsible for and shall each pay 50% of the mediator's fee and the AAA's mediation fees.
Notwithstanding the preceding paragraph, Franchisor and Franchisee agree this Sub-Article 18.G.(1) and, thereby, the prerequisite requirement of non-binding mediation, shall not, at Franchisor's election, apply to: (a) any claims or disputes related to or concerning a breach of this Agreement by Franchisee that, under the terms of this Agreement, may entitle Franchisor to the award of injunctive relief including, but not limited to, Franchisee's violation or purported violation
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, before either party can initiate arbitration for any dispute related to the franchise agreement or relationship, they must first attempt non-binding mediation. This mediation is to be conducted through the American Arbitration Association (AAA) following their commercial dispute mediation rules. Unless both Mrcool and the franchisee agree to a longer period in writing, the mediation must occur within 45 days of the AAA's designation or acknowledgment of the selected mediator.
The mediation proceedings will take place in Graves County, Kentucky, or, if a mediator isn't available there, at a location selected by the mediator that is closest to Graves County. A single mediator will preside over the mediation. If Mrcool and the franchisee cannot agree on a mediator, the AAA will select one.
Both Mrcool and the franchisee are responsible for their own mediation costs. They will each pay 50% of the mediator's fee and the AAA's mediation fees. However, Mrcool has the option to bypass this mediation requirement for claims related to a breach of the agreement by the franchisee that could entitle Mrcool to injunctive relief. This means that in certain situations, Mrcool can proceed directly to arbitration or court without first engaging in mediation.
This mediation process is a fairly standard prerequisite to arbitration in franchising, designed to encourage parties to resolve disputes amicably and efficiently before escalating to more costly and time-consuming arbitration or litigation. Franchisees should be aware of these timelines and procedures, and understand the conditions under which Mrcool may waive the mediation requirement.