What Is The Role Of Arbitration in Franchise Business (And How Franchise Attorney Can Help)

In a franchise business, the dispute is quite a common part of the process. It is very natural that the franchisor and franchisee disagree at some points. There are so many issues that can arise as the dispute in the business model and only the professional and experienced Franchise Attorney can handle it by providing resolution.
There are mainly three types of dispute resolutions in a franchise like mediation, arbitration, and litigation and among them, the arbitration is known to be the most proven and effective way till now. There are even mandatory arbitration clauses in the franchise agreement that will help to settle the matter outside of the courtroom. 

What is arbitration?
Arbitration is the most common form of Alternative Dispute Resolution (ADR) which can be seen as the ‘light’ version of the litigation process of the courtroom. When in meditation, both parties want to have an amicable resolution; in arbitration, the process is quite adversarial in the presence of a third party. Both the franchisor and franchisee present their evidence and argument which will be executed by their respective Franchise Attorney. During the process of discovery, they have to attend the hearings where the arguments and questioning the witness will take place.
Why Franchisor must go for the Arbitration?
Generally, the franchisors always prefer arbitration among all the dispute resolutions as they can enjoy certain control over the process. Here are some top favorite reasons that pursue the franchisors to prefer this process.
  • In arbitration does not allow the franchisees to seek the right to a jury trial.
  • The place of arbitration can be the home town of the franchisors.
  • The franchisors are always supported by relevant records that the franchisees don’t have and for that, the limited discovery gives them the benefits.
  • The franchisors can take the help of the mandatory arbitration clauses that will prevent the franchisee from getting punitive damages.
  • The mandatory arbitration provisions, the franchisor can compel the franchisees to pay for the right to assert the court claim.
What Should Franchisee Do?
In case, the franchisee has any dispute, you have to keep a few things into consideration before going for the arbitration. They have to do a careful analysis of the potential outcome and scope of success. As the franchisors already enjoy some advantages, the proof and arguments have to be much stronger. It is advisable for the franchisees to take the help of the experienced and efficient Franchise Attorney to get some positive results.