Jul 31, 2020 - Blog, Franchise Articles by |

What Can You Expect in Mediation, Arbitration or Litigation?

In Parts 1 and 2 of our Ultimate Guide to Franchise Litigation for Franchisees, we covered common issues in franchise litigation and common franchise agreement provisions that can impact franchisees’ rights during the dispute resolution process. In Part 3, we are covering what you can expect when you hire a franchise attorney to represent you in mediation, arbitration or litigation against your franchisor.

Mediation and Arbitration: Two Very Different Forms of ADR

While mediation and arbitration are often lumped together as forms of alternative dispute resolution (ADR), the reality is that these are very different proceedings. With mediation, there is no guarantee that the process will lead to a resolution. Instead, the parties negotiate with the help of a neutral third-party mediator, and they try to find a way to come to terms. In arbitration, however, the arbitrator’s role is to hear the parties’ evidence and then render a final decision. This decision is usually binding (as stipulated in the parties’ franchise agreement), although it may be possible to challenge the arbitrator’s decision in court in some cases.

Mediation and arbitration both involve scheduled sessions at which the parties appear with their legal counsel. In mediation, these are essentially guided negotiation sessions, with the mediator serving to help keep the parties’ negotiations focused and offer potential compromise solutions. In arbitration, the parties will engage in some form of limited discovery beforehand, and then they will take turns presenting their evidence to the arbitrator during a single-day or multi-day hearing.

Litigation: Taking Your Franchisor-Franchisee Dispute to Court

If your franchise agreement does not contain a mandatory ADR clause, if your franchise agreement’s ADR clause is inapplicable or unenforceable, or if you have gone through mediation or arbitration and not achieved a satisfactory result, then it may be time to take your dispute to court. In franchise litigation, the major steps are:

  • Pleadings – During the initial pleadings stage, the attorneys for both parties will submit the necessary filings to the court in order to initiate the lawsuit and begin clarifying the issues in dispute.
  • Discovery – Discovery involves the use of depositions, interrogatories, requests for admission and document requests to obtain relevant information that is in the other party’s possession. Good-faith participation in the discovery process is required by law.
  • Pre-Trial Practice – As your trial date approaches, your attorney and the franchisor’s legal team will file and argue motions designed to achieve goals ranging from having evidence deemed inadmissible to resolving the dispute prior to trial.
  • Settlement Negotiations – Throughout the litigation process, settlement negotiations can continue, and the parties can agree to resolve their dispute via settlement agreement at any time.
  • Trial – If your trial date arrives and a settlement has not been reached, your attorney and the franchisor’s legal team will argue the evidence at trial, and the judge or jury will render a decision that is subject to appeal.

Discuss Your Franchise Dispute with National Franchise Attorney Jeffrey M. Goldstein

We hope you have found our Ultimate Guide to Franchise Litigation for Franchisees useful, and if you need legal advice that is specific to your situation, we encourage you to get in touch. To discuss your dispute with franchise attorney Jeffrey M. Goldstein, call the Goldstein Law Firm at 202-293-3947 or tell us how we can help online today.

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