In a
franchise business, the dispute is quite a common part of the process. It is
very natural that the franchisor and franchisee disagree at some points. There
are so many issues that can arise as the dispute in the business model and only
the professional and experienced Franchise Attorney can handle it by providing resolution.
There are
mainly three types of dispute resolutions in a franchise like mediation,
arbitration, and litigation and among them, the arbitration is known to be the
most proven and effective way till now. There are even mandatory arbitration
clauses in the franchise agreement that will help to settle the matter outside
of the courtroom.
What is
arbitration?
Arbitration is
the most common form of Alternative Dispute Resolution (ADR) which can be seen
as the ‘light’ version of the litigation process of the courtroom. When in
meditation, both parties want to have an amicable resolution; in arbitration,
the process is quite adversarial in the presence of a third party. Both the
franchisor and franchisee present their evidence and argument which will be
executed by their respective Franchise Attorney. During the process of
discovery, they have to attend the hearings where the arguments and questioning
the witness will take place.
Why Franchisor
must go for the Arbitration?
Generally, the
franchisors always prefer arbitration among all the dispute resolutions as they
can enjoy certain control over the process. Here are some top favorite reasons
that pursue the franchisors to prefer this process.
- In arbitration does not allow the franchisees to seek the right to a jury trial.
- The place of arbitration can be the home town of the franchisors.
- The franchisors are always supported by relevant records that the franchisees don’t have and for that, the limited discovery gives them the benefits.
- The franchisors can take the help of the mandatory arbitration clauses that will prevent the franchisee from getting punitive damages.
- The mandatory arbitration provisions, the franchisor can compel the franchisees to pay for the right to assert the court claim.
What Should
Franchisee Do?
In case, the
franchisee has any dispute, you have to keep a few things into consideration
before going for the arbitration. They have to do a careful analysis of the
potential outcome and scope of success. As the franchisors already enjoy some
advantages, the proof and arguments have to be much stronger. It is advisable
for the franchisees to take the help of the experienced and efficient Franchise
Attorney to get some positive results.
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