Professional translation and language interpreting services play an important role in international franchise mediation. Because parties to a franchising relationship share trade secrets, trademarks and profits, disputes can easily happen. When a dispute arises, on the one hand, the party wants to make the wrong right but, on the other hand, the party wants to preserve the franchise relationship. Thus, mediation is a popular choice for dispute resolution involving encroachment, financing, termination and renewal, as it offers a mutually beneficial, win-win solution.
Focusing on the many benefits of mediation within the international franchise world, in 1993 the National Franchise Mediation Program was formed. Under the NFMP, a procedure is initiated by a Dispute Letter from either the franchisee or franchisor and addressed to the other party. The parties then consult concerning the issue and make a good faith attempt to negotiate a resolution within 10 days of receiving the letter. If no settlement is reached within 25 days, the governing body provides a list of five potential mediators. If, after five days the parties fail to agree on a mediator, they are required to submit a ranking of their choices. After mediation, the parties are required to split the cost of the mediation.
Whenever the dispute involves an international franchise, more than one legal system comes into play. Although mediation is just as likely to be used in the international setting, new challenges do arise. In particular is the issue of foreign language, in both the legal documents gathered and the words spoken. To overcome this barrier, a neutral mediator is often selected and both franchisors and franchisees provide their own foreign language translations.
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Foreign Representatives and Foreign Insolvency Proceedings