Franchise Mediation Process


Franchise Dispute Services



Franchise Mediation

Mediation is a facilitative process. In mediation the mediator assists the parties to:

  1. Identify the issues in a dispute;
  2. Develop Options;
  3. Consider Alternatives;
  4. Try to reach an agreement.

The mediator does not provide advice or make any determinations about the dispute.


In any franchise dispute the franchisor and the franchisee must comply with the dispute resolution procedures set out in the Franchising Code of Conduct (the Franchising Code) and the Franchise Agreement.


Under the dispute resolution procedures set out in the Franchising Code, the complainant must tell the respondent in writing:

(a)  the nature of the dispute;

(b)  what outcome the complainant wants; and

(c)  what action the complainant thinks will resolve the dispute.


The parties should then try to agree how to resolve the dispute, but if they cannot agree within 3 weeks either party may refer the matter to mediation.


There are generally two stages to the franchise mediation process, the preliminary conference and the mediation.



The preliminary conference

The mediator will usually contact each party and arrange a separate preliminary conference.

The purpose of the preliminary conference is to:

  • answer questions,
  • explain the mediation process and the underlying principles,
  • explore whether mediation is the most appropriate process for the dispute,
  • discuss the mediator’s role,
  • confirm who will be attending the mediation and in what capacity,
  • discuss the role of any advisers who will be attending the mediation,
  • exchange documentation and if required set a timetable for the exchange of documentation,
  • confirm the date time and place for the mediation.


The mediation

There are a number of stages in the mediation.


Stage 1 – the mediator’s opening statement

The mediator’s statement will normally cover the following issues:

  1. The role of the mediator in the mediation;

    The mediator’s role is to facilitate. The mediator does not impose decisions upon the parties, but is there to assist the parties to reach an agreement.

  2. The procedure that the parties will follow;

  3. The confidentiality of the mediation process;

    Generally the matters discussed in mediation and the documents prepared for mediation are confidential. However there are many exceptions to this rule. Often a mediator will use the expression “mediation is confidential unless otherwise required by law”.

  4. The authority of the parties present at the mediation;

    The parties present at the mediation must have authority to settle the dispute.

  5. The time constraints of the parties present at the mediation;

    Mediations often continue into the evening. Consequently a mediator must know at the outset whether any of the parties have time constraints.

  6. The proposed rules of courtesy to be followed by the parties.


Stage 2 – the parties’ opening statements

Each party will explain its position without interruption from the other party.

At the end of each of the party’s opening statements the mediator normally summaries the key issues raised by the party.


Stage 3 – identifying the issues and setting the agenda

The mediator will list an agenda of issues for discussion and prioritise those issues in the order that the parties wish to deal with them.


Stage 4 – exploring the issues -joint sessions

The parties will discuss the issues set out in the agenda in a joint session.

The mediator will use his or her skills as a facilitator to

  • keep communication open between the parties
  • stick to the agenda; and
  • find common ground between the parties.

Stage 5 – private sessions if necessary

The mediator may spend time privately with each party exploring the issues and reality testing each party’s position. The mediator will not discuss the matters raised in a private session with the other party unless he is specifically authorised to do so.


Stage 6 – negotiation – exploring the options for settlement

The mediator and the parties will identify and explore options for settlement.


Stage 7 – agreement

The mediator will ensure that any oral agreement reached between the parties is accurately reflected in a written agreement or heads of agreement.



The information in this article is general in nature and is not intended to address the circumstances of any person or other entity. Although we do our best to provide timely and accurate information, we do not guarantee that the information in this article is accurate or that it will continue to be accurate in the future.


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