Reading time: 3 minutes

The Franchising Code of Conduct (the Code) now prescribes disputing parties to a Franchise Agreement undertake a mediation before commencing proceedings. The Office of Franchising Mediation Association (OFMA) is often engaged in administering such mediation processes, assigning qualified mediators to the dispute and providing information to franchisors and franchisees on precisely what the process will entail.

If you are party to a franchise agreement and have had your dispute set down for mediation, you should first undertake some important steps to maximise your chances of obtaining a favourable outcome.

1. Obtain Advice

It’s essential that you know your legal rights and obligations and any potential areas of risk so as to articulate your case on the day and undertake a commercial analysis of the situation.

2. Undertake a ‘Best Case/Worst Case’ Analysis

Sometimes, simply writing down the worst possible outcome, weighing up the remedy/damages sought against the potential loss of the franchise business and ancillary costs (such as legal) can be a real eye-opening experience. Doing so enables you to ask, “if everything goes against me, can I afford the consequences?” A franchise lawyer can assist you here, and should be able to provide invaluable advice on where you sit on the spectrum of best to worst case.

3. Review Your Documents

Many franchise disputes have turned on a few words within the Franchise Agreement, or contained in communications between the parties. Before attending the mediation, you should obtain copies and review all relevant documents, and order them in a way that is logical and best supports your case. It may also be helpful to provide the other party with any key documents or communications you are relying on before the mediation.

4. Articulate What You Want

It’s hard to negotiate an outcome when you don’t know what you want exactly. Before heading to the mediation, take a moment to note what orders or outcomes you would seek should the mediation fail and the matter proceed to court. While mediation, by its nature, involves an element of compromise, it’s helpful for each party to articulate what they want at the outset.

5. Make Sure the Right People Attend

If you operate, either as a franchisee or franchisor, through a corporate vehicle, including a trust or Pty. Ltd. company, you should ensure a person attends the mediation who is authorised to settle the matter on that company’s behalf. If you are an employee, you should make sure that before the mediation, you have authority to settle up to $X, or that a person with authority to make such decisions will be on hand and available via phone to consider proposed offers.

6. Be On Time

It should go without saying but on the day, you should dress professionally, be organised, and be on time. Switch your mobile phone off and unless the mediator expressed something contrary previously, you should set aside the entire day for the mediation.

***

Following these steps should assist you to maximise the prospects of a settlement, and ensure the day runs smoothly. After all that preparation, the mediation itself will occur. You can read about what happens at a franchise mediation in our next article. In the meantime, if you have any questions, get in touch with our franchise team on 1300 544 755.

Webinars

New Kid on the Blockchain: Understanding the Proposed Laws for Crypto, NFT and Blockchain Projects

Wednesday 25 May | 10:00 - 10:45am

Online
If you operate in the crypto space, ensure you understand the Federal Government’s proposed licensing and regulation changes. Register today for our free webinar.
Register Now

How to Expand Your Business Into a Franchise

Thursday 26 May | 11:00 - 11:45am

Online
Drive rapid growth in your business by turning it into a franchise. To learn how, join our free webinar. Register today.
Register Now

Day in Court: What Happens When Your Business Goes to Court

Thursday 2 June | 11:00 - 11:45am

Online
If your business is going to court, then you need to understand the process. Our free webinar will explain.
Register Now

How to Manage a Construction Dispute

Thursday 9 June | 11:00 - 11:45am

Online
Protect your construction firm from disputes. To understand how, join our free webinar.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Online
Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards