Who bears the cost of mediation for Spray Net disputes?

According to Spray Net's 2025 Franchise Disclosure Document, in the event of mediation, each party is responsible for covering their own costs. However, the fees and costs associated with the mediator are to be shared equally between Spray Net and the franchisee. This arrangement applies to any claims or disputes that arise between the franchisee and Spray Net, or its affiliates, related to the franchise agreement or any other agreements between the parties.

This means that a Spray Net franchisee will need to budget for their own legal and consulting fees related to the mediation, as well as half of the mediator's fees. This cost-sharing arrangement is a fairly standard practice in franchising, as it ensures that both parties have a vested interest in resolving the dispute efficiently and effectively.

It's important to note that mediation is not required for certain types of claims, such as those involving intellectual property rights, restrictive covenants, or the franchisee's payment obligations. In these cases, Spray Net or the franchisee may pursue legal action without first attempting mediation. The FDD specifies that mediation will take place in the County of New Castle, Delaware, under the auspices of the American Arbitration Association.

Prospective Spray Net franchisees should carefully consider these dispute resolution procedures and associated costs when evaluating the franchise opportunity. Understanding the financial responsibilities related to mediation can help franchisees better prepare for potential conflicts and manage their business finances effectively.