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.
The ACCC recommends the disputer follows the below:
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
- What outcome you want
- What action will settle the dispute
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.