Does the agreement to mediate survive termination or expiration of the Spray Net franchise agreement?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor or its affiliates with respect to any such claim or dispute in any court unless Franchisor fails to exercise its 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 furthermediation efforts are not worthwhile; or (ii) as a result of a written declaration by Franchisor. Franchisor mayspecifically enforce our mediation rights under this Section. Each party shall bear its own cost of mediation, except that you and Franchisor shall share the mediator's fees and costs equally. This agreement to mediate atFranchisor's option shall survive any termination or expiration of the Franchise Agreement and this Guaranty.
- 4.1. Excepted Claims. The parties agree that mediation shall not be required with respect to any claim or dispute involving: (i) any of your payment obligations that are past due; (ii) the actual or threatened disclosure or misuse of Franchisor's Confidential Information;
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the agreement to mediate at Spray Net's option does indeed survive any termination or expiration of the Franchise Agreement. This means that even after the franchise agreement ends, the obligation to participate in mediation, if Spray Net chooses it, remains in effect.
However, there are exceptions to this mediation requirement. Mediation is not required for claims or disputes involving a franchisee's past due payment obligations, the actual or threatened disclosure or misuse of Spray Net's confidential information, the actual or threatened violation of Spray Net's rights in its Proprietary Marks, System, or other trade secrets, any of the restrictive covenants in the Franchise Agreement, or any claims related to fraud or misrepresentation by the franchisee, or the franchisee's insolvency. These are termed "Excepted Claims."
Spray Net retains the right to specifically enforce its mediation rights. Each party is responsible for their own mediation costs, but the fees and costs of the mediator are to be shared equally between the franchisee and Spray Net. This clause ensures that disputes can be addressed through mediation even after the franchise relationship concludes, potentially avoiding costly and time-consuming litigation, except for specific claims that Spray Net deems inappropriate for mediation.