Top tips for handling franchise disputes before they escalate

• Talk early and talk openly

Lack of communication is often the root of a problem and misunderstandings can snowball when left unchecked. As soon as you spot an issue, pick up the phone or arrange a face-to-face meeting. Be clear, respectful and open to hearing the other side. Early conversations are quick, cost-effective and preserve goodwill.

• Mediate, manage, move forward

If talking things through doesn’t help, or you’re unable to reach an amicable solution, mediation is a great next step. If you’ve not come across it before, mediation is a more flexible form of Alternative Dispute Resolution (ADR) which listens to both sides to find common ground in a confidential setting. A professional mediator facilitates or chairs conversations with the view to reaching an agreement – and nothing is binding until you both agree. This enables both parties to explore solutions without committing too early.

• Keep arbitration in your toolkit

Sometimes, you need a more formal approach that still avoids the cost and publicity of court. Arbitration is more formal than mediation and uses a neutral decision-maker who issues a binding
ruling. It’s usually faster and cheaper than litigation, and still keeps matters private – which is even more important if you are considering any outcomes on your business reputation.

• Court as a Last Resort

Litigation should be the final step when all else fails. It’s formal, public and can be time-consuming – which is also costly – but it delivers a legally binding outcome. Before heading to court, we’d always recommend making sure you’ve exhausted every alternative route.

Extra pointers for an even-smoother process

•  Check your ADR clause in your franchise agreement so you know the agreed process forndisputes.
• Know the governing law and jurisdiction. Where and how your agreement will be enforced matters.
• Don’t delay. Addressing problems early is far less disruptive than tackling them after they’ve grown into obstacles.
• Handled well, even disagreements can strengthen a franchise relationship by improving
  communication and trust. The key is to tackle them head-on, stay professional, and use the right tools for resolution.

For more information or advice about your own situation, contact the franchising team at Downs Solicitors.