How are mediator fees shared between Spray Net and the franchisee?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
The parties will not be required to first attempt to mediate a controversy, dispute, or claim through mediation as set forth in this Section 21(C) if such controversy, dispute, or claim concerns an allegation that a party has violated (or threatens to violate, or poses an imminent risk of violating): (i) any federally protected intellectual property rights in the Proprietary Marks, the System, or in any Confidential Information or other confidential information; (ii) any of the restrictive covenants contained in this Agreement; and (iii) any of Franchisee's payment obligations under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, if a dispute arises and the matter proceeds to mediation, the costs are shared between the franchisor and franchisee. Specifically, each party is responsible for covering their own individual costs associated with the mediation process. However, the fees charged by the mediator are split equally between Spray Net and the franchisee.
This arrangement means that while a franchisee will need to budget for their own legal and consulting expenses related to the mediation, they will only be responsible for half of the mediator's fees. This can help to make the mediation process more financially accessible for franchisees, as mediator fees can sometimes be substantial. It also incentivizes both parties to engage in the mediation process in good faith, as both have a financial stake in reaching a resolution efficiently.
It is important to note that this agreement to mediate survives any termination or expiration of the Franchise Agreement. However, there are exceptions where mediation is not required, such as cases involving intellectual property rights, restrictive covenants, or the franchisee's payment obligations. In these specific instances, either party can pursue legal action without first attempting mediation.