I had to chuckle at this story on arbitration in today's WSJ.
Most franchise contracts once called for mandatory arbitration of issues, rather than going to court. But these days there is growing pressure -- from franchisees, judges, Congress and even some franchisers -- to rethink that longstanding arrangement.
"The trend toward arbitration has pretty much ended," says Peter Lagarias, a franchisees' attorney in San Rafael, Calif.
Among the concerns is that there is no guaranteed right of appeal. "You have to take what the arbitrator decides," says Joshua Becker, an in-house counsel for fast-food franchiser Kahala Corp. For that reason, he says, Kahala, whose brands include Blimpie submarine sandwiches and TacoTime, favors resolving issues with franchisees in court.
Why am I laughing? Because my friend Charlie Berwanger (whose firm, I just noticed, recently opened a Chicago office) and I wrote an article titled "Arbitration in the 1990s - Absolute Power Corrupts Absolutely and an Appealing Solution" back in...oh...1995? It basically made all of the same points, thirteen years ago. I guess it is always nice to be ahead of the curve.