In recent years the system of distributing goods and services known as franchising has had phenomenal growth. Today over twenty-five per cent of all retail sales, representing ten per cent of the gross national product, are made by persons licensed to distribute the goods and services of another. Commensurate with this growth, however, there has been a proportionate increase in the number of disputes arising out of franchise contracts. As a means of solving these disputes and reducing franchise contract litigation, provisions for commercial arbitration are becoming more common in franchise contracts. Affording to the parties an expeditious, inexpensive, informal and private remedy, commercial arbitration represents a safety valve for solving disputes before they reach litigation proportions. Proposed state and federal legislation indicates a favorable attitude toward settlement of franchise disputes by arbitration and even suggests that the disparity exisiting in the bargaining positions between the franchisor and his franchisee may be eliminated by the machinery of arbitration.