Where will arbitration take place for disputes related to a Chatime franchise?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| u. Dispute resolution by arbitration or mediation | §16 | Except as otherwise provided, all disputes and claims relating to your Franchise Agreement or the relationship of the parties must be settled by mediation or arbitration in New York in accordance with the rules of the American Arbitration Association ("AAA") mediation and arbitration service. These provisions are subject to state law. |
|---|---|---|
| MDA: §14 | Except as otherwise provided, all disputes and claims relating to your MDA or the relationship of the parties must be settled by mediation or arbitration in New York in accordance with the rules of the AAA mediation and arbitration service. These provisions are subject to state law | |
| v. Choice of forum | §16 | Arbitration in New York in accordance with the rules of the AAA service. These provisions are subject to state law. |
| MDA: §14 | Arbitration in New York in accordance with the rules of the AAA service. These provisions are subject to state law. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 43–52)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, arbitration for disputes relating to the Franchise Agreement or Multi-Unit Development Agreement (MDA) will take place in New York. The arbitration will be conducted in accordance with the rules of the American Arbitration Association (AAA). This applies to disputes and claims relating to both the Franchise Agreement (§16) and the MDA (§14). However, these provisions are subject to state law, which means that specific state laws may impact the arbitration process or location.
This means that if a Chatime franchisee has a dispute with the franchisor that cannot be resolved through mediation, the franchisee may be required to travel to New York for arbitration. This could potentially increase the cost of resolving disputes due to travel expenses, legal representation in New York, and other related costs. Franchisees should consider this when evaluating the potential costs and risks associated with investing in a Chatime franchise.
It is important for prospective franchisees to consult with a legal professional to understand the implications of the arbitration clause and how state laws might affect the process. Franchisees should also inquire about any prior instances where arbitration was pursued and the outcomes of those cases to better assess the potential for disputes and the fairness of the arbitration process.