What rules govern the mediation process for Spray Net franchise disputes?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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 between a franchisee and Spray Net, the franchisee must first attempt to resolve it internally with Spray Net's management, following the notice procedures outlined in Section 21(G) of the agreement. This internal dispute resolution must be exhausted before involving any third party. This requirement to attempt internal resolution survives any termination or expiration of the franchise agreement.
If the internal dispute resolution is unsuccessful, Spray Net has the option to require that the dispute be submitted to mediation. This mediation would take place in New Castle County, Delaware, and would be conducted under the auspices of the American Arbitration Association (AAA). The mediation process would follow the AAA's Commercial Mediation Rules in effect at that time.
This means that a Spray Net franchisee could be required to travel to Delaware for mediation, and they would have to follow the AAA's rules for how the mediation is conducted. Franchisees should become familiar with the AAA's Commercial Mediation Rules to understand the process. The requirement for mediation is at Spray Net's option, giving them control over whether this step is pursued. Franchisees in Minnesota should also note the addendum regarding franchisee's rights to any procedure, forum, or remedies provided by the laws of the jurisdiction.