Where will mediation take place for Spray Net franchise disputes?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
ct of laws principles.
- B. Internal Dispute Resolution. Franchisee must first bring any claim or dispute between Franchisee and Franchisor to Franchisor's management, after providing notice as set forth in Section 21(G) of this Agreement, and make every effort to resolve the dispute internally. Franchisee must exhaust this internal dispute resolution procedure before Franchisee may bring Franchisee's dispute before a third party. This agreement to first attempt resolution of disputes internally shall survive termination or expiration of this Agreement.
- C. Mediation. At Franchisor's option, all claims or disputes between Franchisee and Franchisor (or its affiliates) arising out of, or in any way relating to, this Agreement or any other agreement by and between Franchisee and Franchisor (or its affiliates), or any of the parties' respective rights and obligations arising from such agreement, which are not first resolved through the internal dispute resolution procedure sent forth in Section 21(B) above, will be submitted first to mediation to take place in the County of New Castle, Delaware, under the auspices of the American Arbitration Association ("AAA"), in accordance with AAA's Commercial Mediation Rules then in effect. Before commencing any legal action against Franchisor or its affiliates with respect to any such claim or dispute, Franchisee must submit a notice to Franchisor, which specifies, in detail, the precise nature and grounds of such claim or dispute. Franchisor will have a period of thirty (30) days following receipt of such notice within which to notify Franchisee as to whether Franchisor or its affiliates elects to exercise its option to submit such claim or dispute to mediation. Franchisee may not commence any action against 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 further mediation efforts are not worthwhile; or (ii) as a result of a written declaration by Franchisor. Franchisor's rights to mediation, as set forth herein, may be specifically enforced by Franchisor. Each party will bear its own cost of mediation and Franchisor and Franchisee will share mediator fees equally. This agreement to mediate will survive any termination or expiration of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, mediation will take place in the County of New Castle, Delaware. This applies to all claims or disputes between the franchisee and Spray Net (or its affiliates) that arise from the franchise agreement or any other agreement between the parties. The mediation will be conducted under the auspices of the American Arbitration Association (AAA) and will follow AAA's Commercial Mediation Rules.
Before mediation, the franchisee must first attempt to resolve the dispute internally with Spray Net's management. This internal dispute resolution procedure must be exhausted before the franchisee can bring the dispute before a third party. This requirement to attempt internal resolution survives the termination or expiration of the franchise agreement.
Spray Net has the option to require mediation. If Spray Net chooses mediation, the franchisee cannot commence any arbitration or legal action unless Spray Net fails to exercise its option for mediation or the mediation proceedings are terminated. Termination can occur if the mediator declares further efforts are not worthwhile or if Spray Net makes a written declaration to terminate the mediation. Each party bears its own costs of mediation, but the fees and costs of the mediator are shared equally between the franchisee and Spray Net.
Certain claims are excluded from the mediation requirement, including those involving past due payment obligations, the disclosure or misuse of Spray Net's confidential information, violations of Spray Net's rights in its proprietary marks or trade secrets, breaches of restrictive covenants in the franchise agreement, and claims arising from fraud, misrepresentation, or insolvency.