It’s normal to have conflicts in a business. While some are healthy and assist in cementing the relationship, others lead to claims. Due to the nature of the franchise business, it’s sometimes hard to avoid conflicts. If you have a conflict that has resulted in a claim, you may be wondering how to go about your case. In this article, you will learn how to resolve your franchise dispute and file a claim against your franchisor.
Disputes in Franchise Business
When entering into a franchise agreement, you must have come across the internal procedure of handling complaints. Examples of disputes in a franchise business include:
1. Disputes over failure to comply with the terms of the franchise agreement, such as training from the franchisor.
2. Issues with payments such as royalties.
Solving a dispute may seem easy, but when it comes to the real issue, you may find yourself stuck.
For one, even if you have a claim against your franchisor, it’s good to note that you will have probably been getting training and support from your franchisor. So it would also pay to handle any matters in the right way. One best way that is recommended is to handle conflicts through mediation. This is an effective tool for resolving disputes, or rather; it seems to be the most structured way to go.
Any franchise business is governed by the relationship between the franchisor and the franchisee. Therefore, it would be advisable to ensure that disputes from such relationship are not understated. The reason is that the success of one depends on the other. For instance, a franchisee needs the training to execute his franchise business in the right way.
Therefore if both parties stand up and resolve their disputes amicably, both stand to benefit. If you have a dispute, you must manage such issues as soon as possible. This is the best way to get back to your business.
There is an internal document that dictates how disputes should be handled. And despite the guidelines set, it may not be easy to know where to start. If not sure about the process, you can consult firms for international mediation. However, not all disputes may require being resolved through mediation. Again, some disputes require one sitting to resolve, while others may push to litigations. In case your dispute has not been resolved through mediation; the best way would be to litigate.
When Mediation does not resolve the Issues
As earlier stipulated, the FDD must contain procedures to be followed in a case of disputes. If all seems not to go well and your case demand litigation, you will need some light on filing a claim against your franchisor. Before filing a claim, you may consider to inform your franchisor: You may write a letter to your franchisor and inform them about the dispute and what kind of action you will take if your matter is not resolved.
Remember that you will have tried to resolve the issues through mediation, and there may be no response. If no response, you may proceed to court. Note that the court process may be formal and more costly.
It’s tough to get to the point that you will file a claim against your franchisor. But this may be the only option left. Even in case of disputes; you need to be aware of your rights as a franchisee. If your grievances are not heard, you have a right to take the matter to court. What you need to present as your basis for the dispute may include:
1. Your franchisor acted in bad faith even after the breach of the agreement. You can show that he failed to follow what was indicated in the FDD.
2. You were wrongfully terminated. Your franchise agreement was not renewed as per the agreement
3. Your franchisor Stopped providing Training and Customer Care.
In most cases, franchise agreements are pretty limited on what one can do. So it is vital to read the Franchise Disclosure Document to understand what is needed. It is the best way to understand the terms you have agreed to and what may result in a dispute.
If you are sure you have met all the requirements, then you can comfortably seek justice with the help of a lawyer who understands mediating franchising disputes.
Speak with a Lawyer
If you have been involved in unfair business practices, or your franchisor has breached the terms of the franchise agreement, and mediation is not fruitful; you may file a claim. There is so much to handle when it comes to litigation; you may have to deal with a wide variety of state and federal laws. Therefore, it would be critical to speak to an experienced franchise lawyer who can help you handle the issues.
