What is the prohibited action if a party refuses to mediate a dispute with Stretch Zone?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
If a dispute initiating party refuses to mediate the dispute, the dispute initiating party cannot file any demand for arbitration or complaint involving the matter in dispute. If the other party refuses to mediate, the other party has waived mediation and the dispute initiating party may immediately file a demand for arbitration or a complaint.
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 Stretch Zone's 2025 Franchise Disclosure Document, if a dispute initiating party refuses to mediate a dispute, they are prohibited from filing any demand for arbitration or a complaint involving the matter in dispute. However, if the other party refuses to mediate, they waive their right to mediation, and the dispute initiating party can immediately file a demand for arbitration or a complaint.
Mediation is a common step in franchise dispute resolution, intended to provide a less adversarial and more cost-effective way to resolve conflicts before resorting to arbitration or litigation. The Stretch Zone franchise agreement specifies that mediation must occur before a party can pursue arbitration or file a complaint, emphasizing the importance of attempting to resolve disputes through this method.
The mediation process for Stretch Zone disputes involves using a mediator from FORUM Arbitration, Mediation International or another mutually agreed-upon mediator. The mediation will take place in Broward County, Florida. Both parties must sign a confidentiality agreement. Each party bears their own costs for the mediation and splits the fees for FORUM and the mediator. This clause ensures that both parties share the expenses associated with mediation, encouraging participation and good-faith negotiation.
This requirement to mediate before pursuing further legal action can save franchisees time and money, as mediation is typically less expensive and faster than arbitration or litigation. However, it also means that franchisees must be prepared to engage in a structured negotiation process and potentially travel to Broward County, Florida, for the mediation. Franchisees should consider these factors when evaluating the dispute resolution process outlined in the Stretch Zone franchise agreement.