Franchise TutorialsFranchisee

Tutorial 23: Intro to Dispute Resolution

 Despite best efforts, there may come a time during a franchise partnership where franchisee and franchisor disagree.

Here are the most common resolution alternatives for franchisee and franchisor disputes:

  1. Open Communication – Many issues can be resolved through open communication whereby as a franchisee or franchisor, you present your case in a diplomatic fashion, keeping an open mind and listening. 
  2. Franchisee Advisory Council – This is a group of established franchisees that help provide a formal channel of communication between the franchisor and franchisee. See Tutorial 10 for more details. 
  3. Mediation – Many franchise agreements point to mediation as a resolution. This process is voluntary and non-binding and the mediator must be a neutral third party agreed upon by both parties. 
  4. Arbitration – This is when franchisee and franchisor each pick an arbitrator and the two arbitrators then pick a third (costs are shared between both parties). The arbitration process is then conducted before a panel of three arbitrators who listen to both sides and review all evidence. Once all material is reviewed, the arbitrators deliberate before making a final decision. The entire process may take several months. 
  5. 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.

The opinions or viewpoints expressed herein do not necessarily reflect those of the Canadian Franchise Association (CFA). Where materials and content were prepared by persons and/or entities other than the CFA, the said other persons and/or entities are solely responsible for their content. The information provided herein is intended only as general information that may or may not reflect the most current developments. The mention of particular companies or individuals does not represent an endorsement by the CFA. Information on legal matters should not be construed as legal advice. Although professionals may prepare these materials or be quoted in them, this information should not be used as a substitute for professional services. If legal or other professional advice is required, the services of a professional should be sought.