AAHOA participates in 'private-label' mediation program

While the National Franchise Mediation Program has existed for two decades, the hotel industry hasn't fully used the mediation process. During AAHOA's annual convention and trade show held last month in Grapevine, Texas, a "private-label" mediation program was announced to attendees. The program is a viable business solution that can result in a more timely resolution with less legal expense for franchisees and franchisors.

As franchisees, AAHOA members recognize the value of businesspeople working together to craft a customized business solution, and the association assumed the initiative to create a lodging-industry-specific mediation service. The core of the program focuses on bringing together lodging industry experts in a mediation environment with the hope they will enable the business partners to craft creative solutions as opposed to the traditional I win/you lose outcomes often resulting when litigation is implemented.

AAHOA seeks a commitment from franchisors to ensure the decision makers from the business side of the particular entity are involved in the process rather than having only legal department staff and associates involved. At the same time, our membership is expected to be realistic and honest about the facts of a situation and allow the mediators to craft a win-win solution with their expertise.

Entering into a mediation process is essentially risk-free for both parties. There's no agreement unless both parties agree. All other resolution options remain open in the event the parties don't reach an agreement, and following mediation, the disputing parties can proceed to arbitration or litigation, having given up no rights.

The mediation program has proven successful. Through the end of 2003, the NFMP reports that when franchisees agreed to participate, the success rate was about 80 percent, with many of those cases resolved after filing for mediation, but before a mediator intervened. When mediation is implemented, it opens the door for dialogue that helps both sides understand the other.

Mediation fosters an opportunity to have full disclosure without any consequences should the parties choose not to live by the mediator's suggestions. AAHOA's role will be that of an honest broker bringing the parties together, ultimately impacting the profits franchisor litigation lawyers receive. If litigation attorneys receive less profit from franchisor-franchisee litigation, it's a victory for everyone--except the attorneys.

hmm@advanstar.com

Hitesh Bhakta, the 2003 chairman of the Asian American Hotel Owners Assn., practices law as a real-estate and business litigation attorney in Southern California. A second-generation, multiproperty hotelier, Bhakta owns and operates a number of hotels in California and Texas with his family.

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