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Can We Resolve Franchise Disputes Faster, Cheaper and Better?

By Steven K. Fedder, John Lande and Peter R. Silverman

Franchisors and franchisees alike are frustrated with litigation. It costs too much, takes too long, and diverts both sides from their core mission ' building the brand. In recent years, we have seen different approaches to alternative dispute resolution, some of which have worked better than others. Even though the vast majority of lawsuits and arbitrations settle before judgment or award, there is an enormous cost and waste of resources involved in the ordinary settlement process. What is needed is a new way to resolve differences between parties that is faster, cheaper, and better.

Resolving franchise disputes early is an important goal for both franchisors and franchisees. Both parties presumably prefer to focus on business rather than litigation, and both have the economic incentive for the franchisee and the entire brand to prosper. If the parties can be convinced that it is in both their interests to enter into candid negotiations before they file suit or demand arbitration, they can avoid wasteful litigation.

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