International Franchise Mediation For SBA Defaulters

What is International Franchise Mediation?

International Franchise Mediation (IFM) is a process whereby an independent mediator works with the franchisor and franchisee to reach an agreement on outstanding issues. The mediator does not make any decisions or impose any solutions but facilitates communication and negotiation between the parties to help them reach a mutually agreeable resolution.

The IFM process can be used for various issues, including disagreements over the terms of the franchise agreement, disputes about payment of royalties or other fees, problems with quality or performance standards, and accusations of wrongful termination. These issues call for international franchise mediation as they would not have been able to achieve on their own.

The use of mediation in franchise disputes is becoming increasingly common, as it offers several advantages over traditional litigation. First, mediation is typically much less expensive than litigation. Second, mediation is generally quicker than litigation, often taking just a few months from start to finish. Finally, mediation offers a confidential forum where the parties can openly discuss their disagreement and work towards a resolution without fear of public embarrassment or damage to their reputations.

What is an SBA Defaulter?

As the name suggests, an SBA defaulter has defaulted on a Small Business Administration (SBA) loan. This can occur for many reasons, but typically it happens when a business cannot make its loan payments and repay the total amount of its loan.

Defaulting on an SBA loan can have serious consequences for borrowers and lenders. For borrowers, it can damage their credit scores and make it difficult to obtain future financing. Additionally, the SBA may pursue legal action against the borrower to collect the outstanding debt. For lenders, defaulted loans can result in financial losses and decreased confidence in the SBA program.

If you are a borrower who has defaulted on your SBA loan, it is important to understand your options and take action as soon as possible. There are a few different ways to resolve a defaulted SBA loan, and working with a professional mediator can help you determine which option is best for your situation. Some common resolutions include:

  • Repaying the total amount of the loan
  • Entering into a repayment plan with the lender
  • Selling assets to repay the debt
  • Declaring bankruptcy

Why do you need international franchise mediation for SBA defaulters?

While SBA franchise failure rates are rising, you may wonder why you need international franchise mediation. The answer is simple: to protect your interests.

When you default on an SBA loan, the government has the right to seize your assets, including your home and business. If you have a franchise agreement, the government can terminate your contract and prohibit you from operating your business.

Benefits of International Franchise Mediation

When a small business owner defaults on an SBA loan, the government has a few options for collecting the debt. One option is to send the case to international franchise mediation. Here are some benefits of using this method:

  1. The process is generally quicker than going through the court system.
  2. It is often less expensive than other methods of debt collection.
  3. The franchisor and franchisee can come to a mutually beneficial agreement.
  4. It can help preserve the relationship between the franchisor and the franchisee.
  5. Both parties have access to legal representation during the process.

In conclusion, international franchise mediation can be helpful for SBA defaulters. It can provide a way to negotiate with the franchisor and reach an acceptable agreement for both parties. Mediation can also help to avoid the costly and time-consuming process of litigation.

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