Michael Millerick, correctly in my opinion, notes that the passage of the Fair Arbitration Act which bans mandatory arbitration in franchise agreements is more likely to pass because of the Supreme Court (US) decision in Rent-Center v Jackson, which allowed the arbitrator to take jurisdiction over the question whether there was an agreement to arbitrate or not.
"Two significant events have, and are occurring, which will change the entire landscape concerning how franchise disputes are going to be resolved.
Over one half of existing franchise agreements include arbitration clauses which require franchisees and franchisors to resolve most of their disputes where the franchisor's place of business is located and before professional arbitrators who presumably have experience dealing with the same types of issues on repeated occasions.
Some find this comforting and cost effective while others think it unfairly favors franchisors.
Reacting to the "consumer" oriented nature of the franchisees' complaints - usually prompted by those who have lost their disputes in arbitration - the U.S. Legislature now has before it two pending bills which will invalidate all arbitration clauses in existing and future franchise agreements as a matter of law. A recent event has made the passage of these bills even more likely."
In New Brunswick, the passage of the Mediation Regulation, under the New Brunswick Franchise Act, which comes into force on February, 2011, now provides for a type of mandatory mediation for franchise disputes.
One party can ask for mediation, and the other party has 7 days to decline the request and provide written reasons for doing so, section 4 of the Mediation Regulation.
Although the regulation does not specify the cost consequences for declining mediation should the dispute become a legal procedure, I can imagine a Judge being interested in substantive reasons for declining mediation.
If you are a franchise mediator, it might be a good time to hang out your shingle in New Brunswick.
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