Where will arbitration take place for disputes related to a Chatime multi-unit development agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise | Summary |
|---|---|---|
| Agreement (FA) and Multi-Unit Development Agreement (MDA) | ||
| a. Length of the | FA: §1.1(27) | The term is ten years. |
| franchise term | ||
| MDA: §1.1(34) | The period ending the end date of the agreed Development Period. . | |
| b. Renewal or extension of the term | FA: §1.1(40); §2.6 | At the end of the initial term of your Franchise Agreement, we may grant you the option to continue operating as a franchisee in your Territory and to enter into a new Franchise Agreement for a renewal term of ten years. |
| MDA: § 2.7 | At the end of the initial term of your Franchise Agreement, you may request to enter into an additional term of ten years under the terms of our then-current form of multi-unit development agreement, which may contain different terms | |
| 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 As |
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, any disputes or claims relating to a Chatime Multi-Unit Development Agreement (MDA) will be settled through mediation or arbitration in New York. This process will follow the rules established by the American Arbitration Association (AAA). However, these dispute resolution provisions are subject to state law, which means that specific state laws could potentially modify or supersede these terms.
This means that if a franchisee has a dispute with Chatime regarding their MDA, they will likely need to travel to New York for mediation or arbitration. This could involve significant travel costs and legal fees, as the franchisee may need to hire attorneys familiar with New York law and the AAA arbitration process.
It is important for prospective Chatime franchisees to understand that the requirement to arbitrate in New York could create a disadvantage for franchisees located outside of New York. They should consider this factor when evaluating the potential costs and benefits of investing in a Chatime franchise and consult with a legal professional to fully understand their rights and obligations under the MDA.