If you own a franchise or are considering one, often arbitration levels the playing field for the franchisee in a dispute with a big and powerful franchisor. Recently, I was contacted by a franchisee who had bought a franchise from a company Franchisor, whose Founder was the President of the IFA International Franchise Association. His dispute did not seem to be viable in his favor and indeed he himself felt that he had no chance against the bigger franchisor. He assumed that the arbitration clause would prevent him from winning his case. Actually, it could very well help him and let me tell you why. In litigation he would run out of money completely. Indeed in court, I would tend to agree that a former IFA President would be a tough case, especially considering the access to incredible fire power and the best of breed attorneys in that industry sector and unfortunately this really puts the question back on him, as in what did you do Wrong? His story like all stories is a one-sided story and therefore who can say how many defaults of the franchise agreement he had? If his case is a strong one then arbitration could help him immensely. In litigation he would be out spent and after his failed franchise he has no money to hire or retain that level of fire-power and even if he did the damages awarded; if in fact they were owed could barely pay for the lawyers. Who would win in that case? The lawyers; he would be better to call in Caesar in that case and eliminate both sides before it started. Consider all this in 2006. |
