How are the filing fee and mediator fees shared in a Stretch Zone mediation?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Informal Dispute Resolution and Mediation Costs. Each party will bear its, his or her own costs in engaging in informal dispute resolution. Each party will bear its, his or her own costs in any mediation except the filing fee and the fees to the mediator will be shared equally by the parties.
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to the 2025 Stretch Zone FDD, in the event of a mediation, each party is responsible for their own costs, except for the filing fee and the mediator's fees. These two expenses are shared equally between the parties involved. This arrangement applies specifically to mediation proceedings as described in Section 17.6(a).
This means that if a dispute arises and progresses to mediation, a prospective Stretch Zone franchisee will need to budget for their own legal and consulting costs, as well as half of both the filing fee required to initiate the mediation and the fees charged by the mediator for their services. This cost-sharing arrangement is intended to promote fairness and encourage both parties to participate constructively in the mediation process.
It's important to note that this cost-sharing arrangement differs from how costs are handled in arbitration. In arbitration, each party initially pays half of the filing fee and arbitrator fees, but the prevailing party may be reimbursed by the non-prevailing party. Understanding these differences is crucial for a Stretch Zone franchisee when considering dispute resolution options.