Who bears the cost of mediation for Spray Net franchise 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 disputes that arise from the franchise agreement or any other agreements between the franchisee and Spray Net, provided these disputes are not resolved through internal channels.

This cost-sharing arrangement has practical implications for prospective Spray Net franchisees. While each party bears its own legal and administrative costs, the equal split of the mediator's fees aims to provide a balanced approach to dispute resolution. This can potentially reduce the financial burden on the franchisee, making mediation a more accessible option.

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 payment obligations. In these cases, Spray Net or the franchisee may pursue other legal avenues without first engaging in mediation. The FDD specifies that the mediation will occur in New Castle County, Delaware, under the rules of the American Arbitration Association.

This type of mediation cost-sharing is fairly common in franchising. It encourages both parties to enter mediation in good faith, knowing they will be responsible for a portion of the mediator's fees. Franchisees should consider these potential costs when evaluating the overall financial implications of investing in a Spray Net franchise.