Mediation
In addition to his work as an expert witness, Chuck is often called upon to serve as a mediator in franchise disputes when the parties are looking for a mediator who has a knowledge of franchising and franchise law, is evaluative, and is willing to discuss the merits of the case with each side. Chuck has been involved in mediations from most every imaginable vantage point. In the early 1980s, before mediation was popular, he had his initial introduction to mediation when representing a multi-unit franchisee in a court-mandated mediation, which resulted in a creative settlement that the parties would never have reached on their own, but that benefitted both the franchisor and the franchisee. Since that time, Chuck has represented numerous franchisors in dozens of mediations and has served as an independent mediator in franchise disputes involving both single and multiple franchisees and their franchisor, and in disputes between franchisee associations and the franchisor. In addition to his client work, he has had the unique experience of viewing the mediation process from the perspective of a party to the mediation while serving on the Board of Directors of Larkin Hoffman.
Chuck published his first mediation article (Successful Mediating: Tips for Successfully Mediating Franchise Disputes) back in 2001 in an effort to explain to members of the bar that mediation is almost always beneficial in that it forces the parties to talk to each other. It allows them to see the other person’s position through the eyes of a neutral third party and, when successful, it keeps the parties from spending tens of thousands of dollars or more and leaving their fate in the hands of a judge, jury or arbitrator who may not really understand their issues. From a franchisee’s perspective, a long drawn-out court fight will often destroy the business. The mediation process significantly increases the chance the parties will save their relationship, save the franchisee’s business, and preserve the business as a member of the franchise system.
A decade after publishing his first mediation article, Chuck published an article in a national franchise newsletter, advocating for the inclusion of mandatory pre-litigation mediation clauses in franchise agreements (Arbitrate? Litigate? Avoid Both Through Mediation). Over the years, his mediation experience has led him to publish a number of other articles for franchisors, franchisees, and non-franchised businesses discussing the benefits of mediation. Two articles in particular address franchise mediations, one from the viewpoint of things to do to make the mediation successful and one from the viewpoint of mistakes people make that cause mediations to fail.
When practitioners first think about selecting a mediator, they often think about retired judges. While Chuck cannot claim judicial experience, he has been certified as a commercial arbitrator by the American Arbitration Association for over 30 years. The cases he has arbitrated include disputes between franchisors and franchisees, franchisors and former franchisees, and manufacturers and dealers. He has also arbitrated disputes involving trademark licenses and sponsorship/advertising issues. He has served as sole arbitrator and on three-arbitrator panels. Thus, he brings to the proceeding a very clear understanding of the adversarial process and the way franchise cases are viewed by arbitrators (including arbitrators with little or no franchise experience who have sat with him on tribunals). This understanding and experience enables him to help the parties analyze their case, just as a former judge would do, but with both mediation experience and extensive knowledge of franchise law and the realities of the franchisor-franchisee relationship.
Representative experience in mediation includes:
- Successfully mediated a termination and buy back of a California regional franchisee of an international quick service franchise business.
- Retained as an independent mediator in a case involving the termination of a Minnesota distributor who claimed to have purchased an unregistered franchise. The mediation resulted in a settlement of the matter before litigation had been initiated.
- Successfully mediated numerous settlements involving franchisees who left the system, both as counsel to the franchisor and as mediator.
- Retained by a franchisor and its independent franchisee association to help resolve extensive disputes between the two groups. The mediation took multiple sessions, resulting first in a resolution of all claims involving franchisees that had left the system, and then a resolution of all disputes with franchisees remaining in the system.
- Retained as an independent mediator between a franchisor and its multi-unit franchisee in Florida and successfully mediated the purchase by the franchisor of the franchisee’s business.
Interested in learning more about franchise mediations? Please see additional recommended reading:
- Mediation of Franchise Disputes, by Charles Modell, Arthur Pressman, and Sherin Sakr, International Franchise Association, 55th Annual Legal Symposium, May 7-9, 2023
- What Franchise Litigators Can Learn from Transactional Lawyers about Mediation, by Arthur L. Pressman, Summer 2021, The Franchise Lawyer
- Save Your Business: Mediate, Don’t Litigate, by Charles Modell, January 1, 2019, The Larkin Hoffman Franchise Blog
Larkin Hoffman's Franchise Team
Attorneys on Larkin Hoffman’s franchise and distribution team use their deep industry experience to help clients gain an edge over their competitors. We advise franchisors of all shapes and sizes – from start-ups to sophisticated multinationals, bringing extensive knowledge not only of the law, but also of business issues unique to franchising.