Brisbane office (07) 3180 0150
Gold Coast office (07) 5529 8803
Home >  Blog >  Franchise Mediations - helpful or a waste of time?

Franchise Mediations - helpful or a waste of time?

Posted by Elizabeth Gore-Jones on 20 February 2020

I am a staunch supporter of mediations in franchise disputes.

In a world where litigation can be outside the financial reach of many parties (franchisors and franchisees) mediation gives the parties an opportunity to reach a resolution which helps to avoid:

1. the expense of litigation;

2. the time and effort of litigation;

3. the stress of litigation;

4. bad publicity; and

5. tying up resources that could be best expended on looking forward rather than backward.

Many franchisees believe that franchisors are just "playing the game" when participating in mediation, and they really aren't motivated to resolve an issue because they assume the franchisee cannot afford to progress the matter to litigation if the dispute does not resolve at mediation.

I obviously cannot speak for all franchisors and, in some instances, that may be the franchisor's strategy.  However, franchisors may be motivated to resolve the dispute at mediation for a number of reasons which may include:

A. they recognise it is not in anyone's best interests to keep an unhappy franchisee in the franchise system, the mediation may give the parties a forum to negotiate an exit strategy;

B. they realise they have breached the franchise agreement, the Franchising Code of Conduct or other applicable law and it is in their best interests to reach a resolution at mediation;

C. they are concerned about bad publicity;

D. they are concerned about the franchisee influencing other franchisees to go down the same path; and

E. they are concerned about the franchisee making a complaint to the ACCC.

There are no guarantees that a mediation will be successful.  However, if the parties cannot resolve a dispute then a mediation is a valuable tool to use in the process.

*You should seek legal advice about your particular legal circumstances. 

Author: Elizabeth Gore-Jones
About: Elizabeth specialises in franchising law. She lectures at Bond University PLA in franchising, she sits on the Queensland Law Society Franchising Committee, she is a past member of the Women in Franchising committee and a past member of the Franchise Council of Australia.
Connect via: Twitter LinkedIn
Tags: Business Franchisee Franchisor

latest news

Potential ACCC Relaxtion in the Time of Covid-19

Mar 29 2020
The focus of the law can change so quickly in a crisis. The ACCC released a press release on 27 March 2020 which reflected just that. Whilst we are far from a lawless nation, these relaxations are sensible and will hopefully help to save bus...

Quick Question?

Liability limited by a scheme approved under professional standards legislation

Brisbane Office Address: Clarence Chambers,
Level 10, 239 George St,
Brisbane QLD 4000

Gold Coast Office Address: Wyndham Corporate Centre
Level 9, 1 Corporate Court
Bundall QLD 4217

Central Post Office Box Address: P.O. Box 428
Oxenford, QLD 4217