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Keeping The Peace

Franchise dispute? Try mediation, says New York.

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This story appears in the November 1999 issue of Entrepreneur. Subscribe »

The National Franchise Council (NFC) took one step forward in its quest to turn franchisors and franchisees away from litigation and toward mediation. This spring, state Attorney General Eliot Spitzer made New York the first of 12 states with franchise regulation to adopt the NFC's education process. Now the NFC's goal is to get the other states on board.

As it stands, if a franchisor commits a minor violation of the New York Franchise Act (for example, not upholding the disclosure requirement), the franchisor can go through NFC retraining in franchise sales practices rather than endure an enforcement proceeding and its consequences. "This shows franchisors are willing to step up to the plate to solve problems and cooperate with regulatory agencies, whether it's on a federal or state level," says NFC chair Morton Aronson.

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