Lawyer

Franchise Agreement: Arbitration Clauses

Every franchise is governed by a contract between the licensor; the franchisor; a licensee; and the franchisee. These contracts are called Franchise Agreements. With franchise businesses accounting for 40% of all retail sales in Canada through 78,000 franchise units, mediation and arbitration clauses are becoming increasingly prevalent. While these franchise agreements may offer significant advantages in some disputes, they may be inappropriate or even increase the complexity, time and cost in other scenarios. Here’s what you need to know about arbitration to determine if it is an appropriate franchise agreement for your business.

Franchise arbitration is one of many clauses that can provide advantages during in-court litigation proceedings. An arbitration clause is a stipulation in your franchise agreement that requires the parties to resolve their disputes through arbitration, outside of court. The outcome of a dispute is decided by one or more persons (“arbitrators”, “arbiters” or “arbitral tribunal”), which renders the “arbitral award”. An arbitral award is legally binding on both sides and enforceable in the courts. A significant advantage of arbitration is the choice of arbitrator and the opportunity to specify that the arbitrator must be experienced in arbitrating franchise disputes.

However, disputes over the arbitration clause or agreement, especially over the enforceability of certain provisions or the choice of arbitrator, can prove costly and time consuming. In these cases, the complications often negate the expected advantages of these franchise agreements, since they are designed to be a quick resolution of a dispute. Law Works Waterloo specializes in franchise law and offers a variety of solutions to franchise disputes.

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3 Steps in Franchise Disputes

Day-to-day business responsibilities can be complex. Ensuring your business operates effectively and turns a profit can be a constant source of stress. The expectations for operation, double if your business is a franchise. Not only must you operate in a manner that meets your own business goals, the business must follow a certain set of criteria set out by the franchisor. The franchisor and franchisee relationship can be mutually beneficial however, there also is a potential for conflict. Franchise dispute can be an unfortunate circumstance, in franchise relationships and if you find yourself facing one there are a few steps to keep in mind:

Notify other party of the dispute

You must issue a formal notice of dispute, to the other part involved, wherein you explain what the dispute is about, what your preferred resolution is, and what other steps you believe the other party should take.

Attempt Resolution

Trying to resolve the matter is the preferred method but if a resolution is not possible either party has the right to request franchise mediation.

Attend Mediation

Both parties, in person, must attend mediation or a selected representative may attend on a party’s behalf. The goal is to resolve the dispute but ensure you are willing and able to attend because if you do not, you can be fined.

If you are facing a franchise dispute in Mississauga and require professional advice, guidance, and service then contact Law Works your expert in franchise litigation, arbitration and insolvencies.

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3 Tips to Selecting the Right Lawyer for You

There are many steps and processes involved in legal cases and trying to navigate them, on top of daily responsibilities can be overwhelming. Making sure you have the best representative for you and your needs is of key importance. When it comes to selecting a lawyer consider these 3 steps to help make your decision:

Select a Lawyer with Particular Expertise

Selecting a representative who has expertise in the area your case involves will be the best support system because they understand your needs and can best represent you and your case.

Research Potential Lawyers

Your local bar association will provide you some insight, as you will be able to find public records of complaints and disciplinary actions taken. There are also online sites that provide reviews but make sure to check more than one in case of bias.

Check their Website and Arrange Consultations

A lawyer’s or law firm’s website will have specific information on the type of law the attorney practices, as well as reference their years of practice and any achievements. Once you have selected a few top ones, set up consultations to get a feel for their style and take notes to refer back to.

These 3 steps are a brief guideline in how to begin the process of selecting a lawyer but the key is selecting a lawyer with expertise in your particular case. If you require a franchise lawyer in Mississauga than Law Works an expert in Franchise law is the firm for you.