When it comes to managing a brand, franchisees and franchisors can butt heads. Everybody wants their voice heard and everyone wants to do what’s best for the business. There may come a time when partners disagree. Instead of yelling matches, here are some dispute resolution alternatives for franchisee and franchisor disputes:
- Open communication: Get diplomatic with it. Keep an open mind and listen. Many issues can be resolved through open communication.
- Franchisee Advisory Council (FAC): Consult your FAC. FACs are made up of franchisees that provide a channel of communication between the franchisor and franchisee. FACs discuss topics like advertising, field support, operations, evolving market trends, and more. Franchisees can share input and voice any concerns regarding the state of the franchise system.
- Mediation: Many franchise agreements point to mediation as the first method toward resolution. This process is voluntary and non-binding, and the mediator must be a neutral third party agreed upon by both the franchisor and the franchisee.
- Arbitration: Arbitration involves impartial third parties who settle the dispute. The franchisee and franchisor each select an arbitrator. Both arbitrators pick a third arbitrator. The panel of arbitrators listen to both sides of the dispute and deliberate before making a final decision. This process can take several months.
The Canadian Franchise Association (CFA)’s Ombudsman program, is a free program available to all franchisees and franchisors in Canada. Completely confidential (and informally done over the phone), the Ombudsman will listen to one or both sides and try to facilitate communication. You can contact the CFA Ombudsman at 866-443-8255.