Dispute Resolution Strategies for Franchises

Before signing a franchise contract, review the document to make informed choices. Most franchise disputes emanate from the pre-contractual stage when information is exchanged between the franchisors and prospective investors (franchisees). It’s important to resolve conflicts promptly to avoid more serious challenges that could hurt a franchise. Most franchise businesses contact the best franchise law firms to help them resolve disputes.

Steps To Resolving A Franchise Dispute

Prompt and cost-efficient resolutions are crucial for franchise disputes. Most disputes can be manageable, provided communication channels remain open. In other words, communication is the key to handling franchise disputes.

While research shows that most franchise disputes resolve out of court, some require intervention from arbitrators or court action in extreme cases. This article outlines the steps to resolve franchise disputes, in-line with the provisions of the Franchise Law.

  1. Raising the Issue with the Other Party

The aggrieved party can be the franchisee or franchisor. Whatever the case, the issue at the center of the dispute should be raised through writing. A sound notification should include the following issues:

  • The nature of the dispute;
  • The desired outcome, and
  • The suitable resolution strategies for the dispute.

The following issues should be identified if the dispute relates to a breach of the franchise contract or agreement.

2. Respond to Feedback

According to the Franchise Law, a dispute notice evokes the dispute resolution process. The disputing parties should resolve the issue amicably before pursuing other alternatives. The process involves exchanging information, communicating, and attending meetings.

 3. Alternative Dispute Resolution

Alternative dispute resolution strategies can include mediation.

A mediation is presided over by an impartial third party, who guides the disputants but doesn’t make decisions for them.

 4. Arbitration

Arbitration is a more formal resolution strategy compared to mediation. The parties present their grievances to an independent and impartial arbitrator, who makes a binding ruling on the dispute. A lawyer for franchise arbitration can help to dispute franchise partners resolve their issues amicably. The steps to resolving a franchise dispute through arbitration are as follows:

  • Filing a claim;
  • Responding to the claim;
  • Arbitration selection;
  • Pre-hearing meeting;
  • Discovery;
  • Hearing, and
  • Decision-making and awarding the innocent party.

 5. Litigation

Alternative dispute resolutions for a franchise are not always practical. Litigation becomes the only option to resolve a franchise dispute in such a case. However, litigation should be a last resort, Considering the costs and time involved. Different strategies can be used to resolve franchise disputes. A skilled franchise attorney can help you identify the most suits dispute resolution strategy for your case.

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