Ideal franchising agreements always preserve the rights of both, the franchisor and franchisee. The profit earned by a fair means with satisfaction is the key to success of any franchise business. But, this scenario is rarely seen nowadays. At any instance, there is a clash between the franchisor and the franchisee, everything turned up into a dispute. An unhappy franchisee could definitely harm the franchise business while the franchising firm is always on upper hand than the franchisee when it comes to taking legal resources. Owing to this, franchising organization takes the utmost benefit at the time of franchise disputes. Irrespective of the results, franchise litigation is definitely very much dangerous for the franchising organization. It is reflected in the firm’s FDD and this persuades the investor’s decision. This risk is sometimes considered beneficial for boosting the position of the franchisor. On the whole, we can say litigation is having both sides i.e. good and bad for franchising organization. The franchisor or the business owner always has good economic resources and because of this, access to the stronger guidance of law. The process of franchise litigation involves the steps that may lead to a court trial to settle the dispute. In many instances, franchisees may show their disagreement when they have legal trials. Arbitration and Mediation Arbitration and Mediation are the two easiest ways to resolve the dispute between franchisor and franchisee. Sometimes, the franchisor wants to end up the dispute as soon as possible as this affect their reputation among the investors. Mediation and arbitration have a tendency to be more on franchisees side than franchisors. If the franchisor thinks that arbitration process could go in favor of franchising organization, they may try to go for this option while if they think they are weak somewhere, they prefer to go for litigation. Many franchisors normally prefer to keep their options open by being comfortable to stress on arbitration and mediation procedure where they think the process is in favor of franchising organization but, these firms thrust into litigation where they think arbitration and mediation would possibly go against the franchisor. This comfort keeps the franchise on the upper hand and due to frustration, franchisee starts working against the best interest of the franchise owners. So, it is extremely important for the franchisees to recognize their status while lodging the complaints against franchisor to settle the dispute. A franchisee attorney can help you in settling the dispute by preserving your rights
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AuthorMr. Herman has lectured at the First Annual Franchise Conference held in Shanghai, China in October 1998. He has also lectured on Franchising Issues in San Jose, Costa Rica in September 2001, and with the ABA Forum on Franchising in Orlando, Florida in October 2005. Archives
May 2018
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