Does the Red Wagon Club Guaranty include a requirement for mediation in case of disputes?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
The provisions contained in Section 20 (Enforcement) of the Agreement, including Section 20.A (Mediation), Section 20.B (Arbitration), and Section 20.H (Consent to Jurisdiction) of the Agreement are incorporated into this Guaranty by reference and shall govern this Guaranty and any disputes between the Guarantors and Franchisor. The Guarantors shall reimburse Franchisor for all costs and expenses Franchisor incurs in connection with enforcing the terms of this Guaranty.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, the Guaranty agreement does incorporate the mediation requirements outlined in the franchise agreement. Specifically, Exhibit B, the Guaranty and Assumption of Obligations, is subject to the mediation terms detailed in Section 20.A of the Franchise Agreement. This means that if a dispute arises related to the Guaranty, both the Guarantor and Red Wagon Club are obligated to participate in non-binding mediation before initiating arbitration or other legal proceedings.
The mediation process, as outlined in Section 20.A, requires both parties to make good faith efforts to resolve disputes. Either party can initiate mediation by notifying the other in writing, and the mediation should follow the American Arbitration Association's (AAA) Commercial Mediation Procedures unless those rules conflict with the Franchise Agreement. If the parties cannot agree on a mediator within 30 days, either party can request the AAA to appoint one. The written request for mediation must describe the nature of the dispute and the relief sought, and both parties are obligated to engage in the mediation.
The Guarantors are responsible for reimbursing Red Wagon Club for all costs and expenses incurred in enforcing the terms of the Guaranty. This includes costs associated with mediation, arbitration, and any other legal actions necessary to ensure compliance with the Guaranty. The mediation is to be conducted at a location chosen by the mediator within 50 miles of Red Wagon Club's principal place of business, which is currently Coconut Grove, Florida. This requirement ensures that disputes are addressed in a manner that is both cost-effective and convenient for Red Wagon Club.