Creating a Dispute Resolution Plan for your Business
Creating a Dispute Resolution Plan for your Business
Disputes of varying degrees will arise when buying, running and selling a franchise business, but the one thing that sets one business owner apart from another when it comes to customer service, the running of a business and the outworkings of being a franchise, is how they deal with disputes.
Running a franchise business is no easy feat, and much of the time business owners can be so future focused on where they want to be, focused on their sales targets and personal business goals, and so task orientated in the day to day running, that they don’t plan ahead for what possible disputes may arise and what their plan will be when things don’t go to plan. Planning for when things might go wrong is an important step allowing you to be prepared for anything.
Disputes facing Franchisees!
The most common disputes for franchisees are:
- Franchise Agreement boundaries and rules;
- Contractual issues in the buying and selling of the franchise;
- HR/Staff disputes including pay, disputes between team members and unfair dismissal cases; and
- Customer service and complaints.
Dispute resolution is on the rise
Culture and the dispute landscape are so different today compared to what it was 20 years ago. Previously, we would have prioritised a discussion with someone, these days, disputes escalate fast, and many times parties are threatened with litigation. When something did escalate, disputes had to go through the court system back then. Today though, there are alternative dispute resolution options available by fully qualified legal practitioners that can walk you through any disputes that arise, leaving court as the last resort.
Key government bodies have now started to put Dispute Resolution policies, opportunities, and resources in place, to enable parties in a dispute to try to resolve their disputes out of court. Ombudsman offices also offer quite a lot of resource around how to resolve disputes effectively, should something arise. This growing global focus on dispute resolution shows just how important it is to be prepared for anything. Franchise Agreements set out the process for dispute resolution. What does yours say?
Dispute resolution plan for your Business
Creating a Dispute Resolution plan for your business can give you the confidence to deal with disputes in a timely manner. Knowing what your response is before something arises, and knowing the plan, can allow you to get straight onto resolving the conflict and in good time. All disputes need to be assessed to determine how best it can be dealt with. Unresolved disputes costs money, can escalate to lawsuits, lost productivity, loss of morale with staff, and a damaged reputation.
A dispute resolution plan can include a number of features, and the plan may vary slightly for different industries, but these are some I recommend:
1. IDENTIFICATION OF DISPUTE
Disputes can arise out of nowhere, but it’s important to identify the issues surrounding the dispute even if it seems small. Things escalate quickly these days especially with the uprising of social media, so it’s important to identify, and kick your plan in as early as possible.
2. POLICIES AND PROCEDURES
What procedures and policies need to be put into place in your business to ensure things can be resolved in a timely manner? What recording and reporting will you require to cover your franchise business? What documentation can you collate and provide in support? What reporting from time management and financial tools might you need to be up to date in order to create a log of data and fact? How do you back up your systems? What might be missing in your systems that you may need to incorporate for your own peace of mind?
3. SOCIAL MEDIA
Disputes can turn into a massive media storm very quickly with social media out of control these days. You’ve probably seen some brands in recent times, copping flack for making a certain decision, or refusing to deal with a situation that’s unfolded. What will you do when disputes start to gain traction on social media? I would recommend:
- Having someone on hand to help monitor the page.
- Always respond, even if it’s ‘we are aware of X and Y, and we are currently doing what we can to resolve the situation’.
- Remember that no response is actually a response.
- Franchise brands have a great opportunity to stand out by dealing with disputes the right way.
- Remember everyone is entitled to an opinion, but giving them a brand/business statement will show that you are trying to resolve.
- We don’t recommend unpublishing profiles or closing them down. This adds further fuel to the fire.
The amount of businesses who don’t have insurances to protect themselves is really alarming. It’s important each year to mark a day in your calendar to review insurances, make sure they are up to date, and make sure nothing needs to be changed. These days we need Cyber-insurance which is an insurance product used to protect businesses and individual users from internet-based risks, and more generally from risks relating to information technology infrastructure and activities. Are you covered?
4. PLAN TO RESOLVE
You may want to consider the following:
- Who will take charge of resolving any disputes?
- How will they do this, and where?
- Do you have a list of all the contact details of your advisers and support people?
- Would you need any outside contacts to assist?
- Are you obliged to contact anyone or let anyone know that there is a problem or a potential problem?
- Do you need to set aside time or day to resolve it? Or set some meeting times to get things moving?
5. IF THE DISPUTE ESCALATES, WHAT’S NEXT?
When you are in the middle of a massive dispute, it can be hard to think of what your next steps are and while having a good plan in place to ensure things can be dealt with can definitely help keep you grounded, there are times when it’s important to call in a professional mediator to help mediate the issues. We don’t want things to escalate so bad that you end up in long, drawn out court battles that are not only tiring, but possibly a battle that will result in you losing your franchise, or assets or ruining a reputation.
My team work with all types of disputes requiring mediation, and we generally get amicable outcomes, without the costly need to go to court.
So, what is best practice in dispute resolution? The Fair Work Ombudsman’s recommends pursuing dispute resolution outcomes that are:
- quick - it’s important to sort things as quickly as possible;
- fair - all parties need to be heard in any dispute that arises;
- handled sensitively - the way you handle a dispute will say a lot about your brand. Be open and honest, but professional in all your dealings; and
- transparent - all parties need to know the process.
The above dispute resolution plan, allows the entire process to be clear for everyone. To achieve that, my tip to franchisees is this: Make sure you are communicating with the right person. Save your time and effort until you are confident that you are dealing with the decision maker who has the authority to settle the dispute and insist on their personal presence.
You run your franchise businesses in a ‘litigation prone world’. It’s never been so easy to be taken out of context, to be threatened with litigation. It’s actually become harder to even just run a business. One of the best things you can do is plan for disputes, because they will arise in varying capacities. A dispute resolution plan is a bottom drawer document, kept with all other important documents to your business like your Franchise Agreement. Being clear on your next steps, gives you the confidence to calmly resolve whatever comes your way. Avoid panic and remain in control.
Alison Shaw is a former lawyer and CEO of national mediation firm SHAW Dispute Resolution Australia. SHAW Mediation offers voluntary mediation opportunities to everyone for all types of disputes anywhere, anytime for fixed scaled fees. Alison and her national team of mediators are all nationally accredited and have a legal background.