Are you a franchisor or franchisee?
The Franchising Code of Conduct has changed and now requires that franchisors and franchisees attempt to resolve disputes before terminating the agreement.
If you have a franchise dispute the first step is for the concerned party to contact the other party. It is important to communicate the nature of the conflict, the desired outcome and what actions need to be taken to remedy the dispute.
If the dispute cannot be resolved within 21 days, a mediator may be appointed by either party. If both parties cannot agree on a mediator, they need to refer the matter to the Office of the Franchising Mediation Advisor (OFMA). The OFMA will appoint a mediator.
Mediation is about both parties genuinely working together to find a solution. For this reason, not attending mediation discussions will result in a serious penalty.
Typically, mediation is more cost-effective than commencing legal proceedings. But it can be expensive. Each party needs to pay their own costs in relation to attending mediation. These costs can inflate depending on the amount charged by the mediator, venue hire and materials agreed on by both parties (e.g. expert reports).
In the case that mediation fails to resolve the dispute, you are still able to take legal action against the franchisor or franchisee.
If you have a franchise dispute, please contact us to ensure that you are satisfying all of your obligations under the Franchising Code of Conduct.