Sunday, 3 December 2017

Importance Of Having Franchise Arbitration

By Dennis Sullivan


Where there is the mutual benefit between different parties when it comes to a business deal, it is unlikely that there would be any disputes. This is because everything is being shared equally among the parties involved. However, in the real sense is in never the case as many deals are usually surrounded by disputes and require quick resolutions. Franchise arbitration is very important as it gives room for all the necessary measures to come up with a solution.

Disputes usually arise when the interest of the parties differ. This can result in a heated argument that may lead to big legal battles. The franchisee can create bring up some issues that may ruin the reputation of this franchising organization. Since the team has all the finances, it usually has advanced when it comes to legal battles.

To resolve the conflict like this one, it is necessary for mediation to be conducted between the franchise and the franchisor. In many situations the later usually prefer the situation to be resolved as quickly as possible since they do not want to damage their reputation in the presence of these shareholders. However, these negotiations can have both positive and negative results.

In mediation, the franchise tends to be the one that will benefit from the outcome as compared with the other party. When an organization sees that they are going to lose a case through mediation, they quickly try as much as possible to give room for litigation. When reconciliation is not their favorite, they will allow it to happen.

Litigation in this type of business can be very dangerous to the company because it is by being more public. This means that the company will disclose all their financial documents to the public and may make investors develop a negative opinion about the company. This may be a big blow to the organization regardless of outcome. Sometimes the risk may be worth it as it may advance the position of a franchisor.

Most of the time the organization has the upper hand when it comes to litigation regardless of the high risk of damage. This is because they have good legal team and finances to cater for all the legal preceding and actions. This makes some franchisee to be no match due to insufficient funds. Many end up dropping the case together with their claim.

These are rules that give the guideline of conflict resolution between the parties involved. The conflicting parties should always come to the table of mediation first before going or taking extreme measures. It says that arbitration should be the last resort that the complainant is supposed to take. This clause puts are fair ground for both parties to work out their issues, unlike litigation which gives the franchisor advantage. The franchisor usually leaves some room for more option especially to mediation and adjudication when they know it will work in their favor. This openness gives the organization a clear advantage over the petitioner.

When you are pursuing a complaint as a franchise, you should understand your position to avoid huge expenses that may result in the fall of a claim before it even started. You should also have a good lawyer who can represent and negotiate on your behalf when it comes to legal matters that you may not understand.




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