Mediation in franchise as conflict resolution

Franchising brings many entrepreneurs numerous benefits. However, sometimes the interests of the franchisor can be opposed to those of the franchisee(s). Collaboration can also come with differences of opinion and/or perspective. Because we support both franchisors and franchisees, we are exceptionally equipped to fulfill the role of mediator. This helps avoid costly legal procedures and allows you to get to the point more quickly.

What is mediation in franchise?

Mediation is the resolution of conflicts outside of court with the help of an independent party that facilitates negotiations. In a lawsuit, often only one party is satisfied with the outcome. Mediation focuses on achieving a result that makes both parties happy. In a conflict, the franchisor and/or franchisee(s) may no longer be able to find an appropriate resolution together. Both maintain their own stance and can no longer assess the situation objectively. A mediator is neutral, independent, and does not choose a side. Only in this way is it possible to reach a solution. Choosing mediation in franchise costs you less money, time, and energy than a legal process and prevents the franchise relationship from unnecessarily deteriorating.

Because we also establish and develop franchise organizations, we understand the interests of franchisors and know what challenges franchisees face. In our role as mediator, we use our knowledge and experience to come to a satisfactory solution. Curious why we should play this role in your situation? Read below about how we previously applied mediation in franchise.

Mediation in franchise with one of our clients

Situation

In the startup phase of the franchise organization, the franchise formula proved to be very successful. At the same time, it became clear that a professionalization of the support for franchisees was necessary. Better support and agreements could make the franchise formula collectively more successful. The franchisees were unable to resolve the issues with the franchisor and enlisted our help.

Challenge

A previously engaged law firm had looked at the renewal of agreements unilaterally from the franchisee's perspective. They did this with too little understanding of the specific franchise culture and too little focus on creating a win-win situation for both the franchisees and the franchisor. As a result, the franchisees became divided, the relationship with the franchisor deteriorated, and the renewal process stalled.

Approach

By illustrating how other franchise formulas handled similar challenges, it became possible for the franchisor and franchisee to jointly come up with new opportunities and solutions. The joint goal was redefined. From our role, we helped approach the previously made agreements and arrangements primarily from an operational but also from a legal perspective. Because we work for both franchisors and franchisees, and develop the work processes and organization of formulas ourselves, we were (and are) an accepted dialogue partner for both parties. In this way, we guide the process and impartially bring in substantive expertise when this can contribute to creating a solution.

Result

• Realization of an improved franchise agreement
• Acceptance by the association of franchisees and the franchisor with unanimously positive advice from the franchise council
• Implementation of an improved contract and processes
• Room for restoring trust within the franchise organization

Would you like to know more about the possibilities of mediation in franchise? Feel free to contact us.