Mediation Panel Offers Dispute Resolution for Franchisees

Mediation is recognised as a way to resolve disputes within franchises easier, quicker and more cheaply than via legal action. The Franchise Association therefore created a Mediation Panel some years ago to makes available  a group of franchise-trained mediators who are able to help address disputes within the context of the ongoing relationship between franchisee and franchisor.

The dispute between Australian-based Dymocks Booksellers and a New Zealand franchisee, which was ultimately settled by the Privy Council, reportedly cost $4.4 million in legal fees and took five years to resolve. ‘While statistics show that the level of serious disputes between franchisor and franchisee affects fewer than 1% of the 14,000-plus franchised units in this country every year, the impact of those disputes can be significant. They cost time, they cost money and they take away focus from the business on both sides. The Mediation Panel was created to help ensure that the disruption of a dispute is minimised for all concerned.

The Association’s Code of Practice, which is mandatory for its members, requires that franchisors should include a dispute resolution clause within their franchise agreement and provides a suggested procedure for handling disputes. Franchise agreements of non-member companies may also include such a clause but even if the franchisor and franchisee do agree to go to mediation to resolve a dispute, where do they begin? The Association’s Mediation Panel, which is available to non-members as well as members, provides the starting point.

In the event of a dispute, the parties may approach the Association and request a mediator from the Panel. A small fee is applicable for providing this service: this is included in the payments for the mediation. The terms of mediation will be agreed by both parties prior to the mediation process. All members of the Mediation Panel hold at least the following qualifications:

1. They are all professionally experienced as mediators.
2. They have completed the Franchise Association’s course on mediation in franchising.
3. They are current members of the Franchise Association of New Zealand and bound to uphold the Code of Ethics of the Association in their own dealings. Details of the Mediation Panel cmay be obtained from the Franchise Association: email info@franchiseassociation.co.nz