The ability to be in control is central to the concept of franchising. Franchisees are independently minded individuals who wish to have a greater level of control over their working lives than they would have as an employee. Franchisors regard the ability to control their business as fundamental to their role.
For a franchisee, the control comes at the cost of accepting more responsibility, risking their investment in the franchise, and working longer hours. But they willingly accept all this for the benefit of being in control of their own business.
Using franchise mediation to resolve disputes
Franchisors are similarly motivated; they devise a successful business model and recruit franchisees to expand. In every case, they remain in control of the brand and how the franchisees operate their branches. Franchise agreements are drafted to give them the ability to control the network to protect the brand. Control is right at the top of their agenda.
Mostly this works well, but occasionally there are disputes. If a resolution can’t be negotiated, dialogue breaks down and solicitors are consulted. In most commercial situations, if this doesn’t produce a settlement, the next step is litigation. At this stage, what is mostly overlooked is the fact that in a legal action, the parties relinquish control to a court where a ruling will be made by a judge.
Franchise disputes can be resolved with franchise mediation
It is true that during the trial, the parties can regain some degree of control if they restart negotiations and try to reach an out-of-court settlement. And this often happens, but by then, a great deal of time and money will have been spent—needlessly.
Thankfully, almost all franchise agreements contain a mechanism for avoiding costly and time-consuming legal battles. It is called Mediation. And mediation puts both parties right back in full control of the outcome.
The British legal system strongly supports alternative dispute resolution (ADR) because it recognises that courts are constantly overloaded with cases and litigants must wait months for a hearing date. ADR includes Mediation and Arbitration.
An arbitration is quicker and less expensive than a court case, but it still requires the parties to give up control; in this case, to an arbitrator, who will make a judgement. A mediation is different—the mediator is neutral and simply assists the parties in reaching a settlement. And it works, producing success rates above 85%.
A mediation is easy to organise, is usually concluded in one day, and is consequently far less expensive than litigation. Of significant importance to both franchisors and franchisees is the fact that they remain in control of the outcome.
