A franchise business is a lucrative business option where you can have huge profits in a short span. You can invest in a well establish name and start your franchise in a location where people look for that particular service or brand name. However, things are not that sweet sometimes. There are many times; the relation between the franchisor and franchisee goes bad and result in a franchise dispute.
At that point, it is important to have mediation to resolve the dispute. It is very important for all franchisees to know about the mediation rules before they sign the contract. Unfortunately, many people still do not aware of this aspect and end up in a mess.
So here are some important questions that people often ask about International Mediation in the USA. Hopefully, this write-up will help you to resolve all the queries so that you can get a better position in your franchise business.
What is mediation?
Many people still don’t have a clear idea about the basic concept of mediation. It is a dispute resolution process among two parties. In any franchise system, the parties are the franchisor and franchisee. It is non-binding in nature. And for that, any decision cannot be imposed on the party by the mediator. Both the parties must reach an agreement. The mediator should not be a decision-maker like a judge or an arbitrator but they act like support to get a resolution. They help each of the parties to understand the perspective of others. They elevate the communication between the franchisor and franchisee so that they can reach an agreement. Moreover, it is a confidential procedure to encourage openness from both parties.
What are the functions of mediation?
Mediation is an informal process where the outcome is only accepted when both parties come to an agreement. It has many limited functions.
Generally, the International Mediation in the USA follows the below-stated rules.
- The nature of the procedure is non-binding
- The mediator appointment way should be defined
- The fees of the mediator should be determined before the proceeding
- Under their guidance, the parties must commence the mediation and eventually establish the process.
- The cost of the procedure must be borne by both parties
For what disputes the mediation process is effective?
Mediation is not suitable for all types of disputes in the franchise. As this process requires cooperation from both sides, the relation should be amicable. In case of counterfeiting, piracy, or bad faith is involved; it is very tricky to have mediation among the parties. Most importantly, both parties must have a clear objective to get a resolution or have a neutral opinion.
Mediation is the right option for the franchise parties that want to:
- Minimum cost to settle the disagreement
- Control over the process of dispute-settlement
- A quick resolution
- Maintaining the confidentiality of the dispute
- Preserve the relationship with another party for future development
All of these factors, especially the last one are the most important to consider mediation so that they can continue the contractual relationship.