Press Releases

FOR IMMEDIATE RELEASE - March, 2, 1999

AAFD Endorses National Franchise Mediation Program

San Diego, CA - The American Association of Franchisees and Dealers announced recently that its Board of Directors has passed a resolution endorsing the National Franchise Mediation Program administered by CPR Institute of Dispute Resolution in New York. The program, which encourages the mediation of franchise disputes, has operated for several years with the participation of 55 leading franchising companies and the endorsement of the International Franchise Association. Although the program has achieved successful negotiation and resolution of most of the disputes submitted, the program has suffered from underutilization by franchisees and franchisors.

Said NFMP Committee Chair, Lowell Dixon of McDonald's, "We are pleased to have the endorsement of the AAFD. We want to encourage the negotiated resolution of disputes between franchisors and franchisees and avoid litigation which is costly to all parties. We are confident that the AAFD will be a positive factor in giving franchise owners confidence in the process."

The AAFD was very careful in making its decision to endorse the NFMP program. According to AAFD LegaLine Chair, Richard Rosen, "The AAFD appointed a small committee which spent several months evaluating this program. We certainly support the concept of mediated settlement of disputes; our concern was to be sure that this program was fair to franchisees, and protective of the very rights the AAFD has sought to protect."

According to AAFD Chairman, Robert Purvin, the AAFD had two concerns in its evaluation of the NFMP. First and foremost, the program makes no explicit reference to multi-party claims, or for the joinder of common claims by franchisees. Said Purvin, "The AAFD is dedicated to creating a level playing field in franchising, and allowing joinder of common claims is the surest path to allow equal access to justice."

The program administrators agreed that such joinder would not be prohibited by the rules. As mediation is voluntary, the parties have the right to agree to the circumstances of mediation, including the joinder of claims.

The second issue tackled by the AAFD committee was a concern that the NFMP panel of mediators include a number of mediators who are empathetic to the circumstances of small business owners, and the franchise method of doing business. The AAFD Mediation committee raised the concern that a large number of NFMP approved mediators may be perceived as having an orientation to big business. In order to assuage this concern, the NFMP administrators have encouraged the AAFD Mediation committee to recommend candidates to serve as mediators. In fact, Rosen, a founding member of the AAFD LegaLine, has served as both and arbitrator and mediator for several years, and intends to apply to serve as a mediator under the program.

Said Rosen, "The NFMP organizers and administrators met us halfway to satisfy our concerns. We are confident that this is a program which can save both franchisors and franchisees thousands of dollars in resolving disputes, and will hopefully foster a resolution of issues and disputes in a manner which will be both time efficient and which will allow wounds to heal so the disputing parties can get back on track to continue mutually profitable relationships."

The American Association of Franchisees and Dealers is the oldest and largest direct member non-profit trade association representing the interests of franchisees and independent dealer networks throughout the United States. Stressing market solutions and franchisee empowerment through independent franchisee associations, the AAFD has grown to represent more than 12,000 franchised businesses nationwide.

For more information, contact the AAFD at 800-733-9858, or visit our website.