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Top tips for solving franchise disputes

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Top tips for solving franchise disputes

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When two parties in a franchise agreement are in dispute, there are a range of strategies businesses can use to get out of hot water.

As a starting point, open and calm communication is highly recommended, and often all that is necessary to reach a point of negotiation.

However, when a dispute cannot be resolved, the Australian Competition and Consumer Commission has a clear process that should be followed to ensure both the franchisee and franchisor negotiate a fair outcome.

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The ACCC recommends the disputer follows the below:

Step 1

The first step is to notify the other party in writing of the dispute. Be sure to set out the following:

- The nature of the dispute

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- What outcome you want

- What action will settle the dispute

Step 2

If the dispute cannot be resolved in three weeks, the second step is to refer the matter to a mediator.

If both parties cannot agree on a mediator, the ASBFEO can arrange for the Franchising Mediation Advisor to appoint one for the case.

- Plan for mediation

Prior to attending the mediation, make sure to have a detailed plan for how to express concerns including:

- Areas of disagreement and misunderstanding

- Your priorities

- Proposed outcomes

It is compulsory for both parties to attend, with both parties obliged to act in good faith.

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