As with any business dispute, staying on good terms with the other party is crucial for your ongoing partnership and the bfa recommends working towards an amicable resolution without third-party intervention wherever possible. In cases where internal efforts have been exhausted and the resolution is unclear, it may be time to look for outside help to resolve a disagreement. The bfa has a number of options which are detailed below.
The bfa’s free informal conciliation process is available to franchisees and franchisors of member brands. It allows both parties to represent their case and work towards a solution. It is not legally binding, as it’s purely designed to aid in communication between franchisor and franchisee. Find out more about informal conciliation here
Mediation is a structured negotiation between the involved parties. It’s a relatively cheap, quick and confidential process. The mediator is an independent third party who facilitates the negotiations but does not give an award or make a decision, simply bring the parties together to find a commercial solution. Either party has the freedom to walk away from negotiations at any stage of the process. All negotiations take place on a without-prejudice basis and parties are not forced to settle their dispute during this process. Find out more about mediation here
An arbitrator is also an independent third party. The difference is that arbitrators make a decision after hearing both sides. The arbitrator’s decision is final, binding and enforceable. The arbitrator will charge fees for undertaking the arbitration and costs can be awarded against the parties as determined by the arbitrator. The arbitration process can take longer and as such will likely incur higher costs than the mediation process. Find out more about arbitration here
Benefits of alternative dispute resolution
The benefit of choosing mediation or arbitration over litigation is that litigation can be an expensive, uncertain and stressful process which parties often look to avoid. That being said, the obvious first step in any conflict should be to talk and hopefully save your relationship.
The bfa always recommends that you seek independent legal advice from an experienced franchise lawyer. The bfa has a number of affiliated solicitors in membership who specialise in franchising. Their contact details can be found on our affiliate solicitors listings. These solicitors have been accredited by the British Franchise Association to affirm that they have experience in franchising.