When we think of disputes we often think of costly and complex legal action and whether pursuing the issue will be worth it. Thankfully in the world of franchising, disputes are regulated by the Franchising Code. The Franchising Code states that the franchisee and the franchisor should try and resolve their dispute with each other as a first step.

If you have an issue with the franchisor, you should write to them. In this letter you should include what the issue is and how you would like the issue to be resolved (including any time frames etc.). If you are willing to meet with the franchisor (or its representative) to discuss the issue you should also add this. If, after three weeks, no outcome has been achieved (for example, the Franchisor has not responded to your letter, no meeting has been scheduled or you are not satisfied with the proposed solution to the issue), you can arrange for a mediation to take place. A mediation is where you and the franchisor sit down in a room (location and time to be agreed upon by both of you) and talk through your issues along with a ‘facilitator’, that is, an independent third party that try and help you and the franchisor come to an agreed resolution to the problem.

Costs of mediation include the mediator costs, room hire and expenses for travel and accommodation to attend the mediation. You and the Franchisor would share these costs. If there is a resolution at the mediation, the mediator will set out the agreed terms in writing. You and the Franchisor will be bound to these terms. If there is no resolution and you still wish to resolve the issue the next step then would be legal action and speak with a franchise lawyer.

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Lachlan McKnight

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