SETTLING FRANCHISE DISPUTES THROUGH MEDIATION IN MALAYSIA

Abstract

Business opportunities come in many ways and among the most popular one is franchise business. It is built on a long-term relationship which requires trust and full support between the franchisor and the franchisee. Similar to any business relationship, franchise business is also exposed to disputes and friction due to miscommunication or other disagreements between franchisor and franchisee. In the event of disputes, the parties normally resort to type of settlements which are not burdensome to them. They tried as much as possible to settle it and often seek a commercial solution in order to avoid high cost and inconvenience of litigation process. In doing so, parties are more comfortable to overcome their disputes through mediation. Mediation is a voluntary process where an independent third party, called mediator assist the disputing parties to facilitate the negotiation in order to reach satisfactory outcome. This paper aims to study the mediation process conducted in franchise dispute and examine its advantages and disadvantages in settling the disputes between franchisor and franchisee.