Franchise
11. Dispute Resolution
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 27 Jul 2015
- Disputes among franchisees and franchisors are common and can be costly. The Franchising Code of Conduct tries to deter the parties from unnecessary use of litigation by including a mandatory dispute resolution procedure.
- Initially the parties to a franchise agreement should attempt to resolve the dispute between themselves.
- If the parties fail to agree on a resolution within a three week period a mediation takes place. Mediation is a cost-effective and mutually cooperative means of resolving disputes. It is far more cost effective for both parties than resorting to legal action. In mediation the parties negotiate a mutually agreeable outcome for themselves. A mediator will guide this process but does not make a final decision.
- Some situations may not be suitable for mediation or mediation may prove unsuccessful.
- If mediation has been unsuccessful a range of next steps are available.
- If there has been a breach of the Franchising Code of Conduct the relevant party may be able to:
- claim damages;
- obtain court orders to stop any ongoing breach; or
- require changes to the franchise agreement.
- Both parties also have the option of approaching the Australian Competition and Consumer Commission (ACCC) to make a direct complaint. The ACCC’s role regarding franchise arrangements is to ensure compliance with the Franchising Code of Conduct.
- Although a franchisor will be required to participate in the mediation it does not stop them bringing separate legal action in court at the same time. If the issue escalates to this level the services of a lawyer will certainly be required. Our free Find a Lawyer directory provides contact details for lawyers who may suit your needs.
View more Information on Business & Company