How are arbitrators selected for Chatime franchise disputes?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (5) The arbitration panel shall consist of three arbitrators.
AAA shall send each of the Parties a separate list of at least at least ten (10) Arbitrator candidates from the AAA Franchise Panel.
AAA shall also provide each Party with a brief description of the background and experience of each Arbitrator candidate.
- (6) Within seven (7) calendar days of service upon the Parties of their list of names, each Party may select one Arbitrator from their respective list.
The two party-appointed Arbitrators shall name a third Arbitrator who shall act as the Chairperson.
- (7) The fees and expenses of the proceeding may be awarded by the Arbitrator to the prevailing party.
If not so awarded, the parties shall bear their own fees, costs and expenses, and the charges of the arbitration service and arbitrator shall be split between the parties.
(8) After accepting the appointment and during the arbitration, the arbitrator may: require the parties to lodge security or further security towards the arbitrator's fees and expenses; and
apply any security towards those fees and expenses, but the arbitrator may not direct a party to the dispute to provide security for the costs of the arbitration to be incurred by any other party.
(9) The arbitrator shall have no authority to amend or modify the terms of this Agreement.
(10) The arbitrator must include in the arbitration award the findings on material questions of law and of fact, including references to the evidence on which the findings of fact were based.
(11) An arbitration initiated by a Developer can only be brought by a single franchisee or developer, and shall only resolve the claims by the Developer. Developer is not permitted to bring or participate in any group, collective, multi-party, or class action claims against Franchisor or its Affiliates or their respective owners and officers. An Arbitrator shall not have authority to decide any group, collective, multi-party or class action claims against Franchisor or its Affiliates or their respective owners and officers.
(12) Despite anything in this clause 14, a party at any time may commence court proceedings in relation to any dispute or claim arising under or in connection with this Agreement solely for the purpose of obtaining urgent interlocutory relief pending resolution of the Arbitration.
(13) Subject to this clause 14, a party must not commence or maintain a court action or proceeding upon a dispute in connection with this Agreement if the dispute is referred to arbitration under this clause 14.
14.4 Waiver of Jury Trial. EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
14.5 Survival of Dispute Resolution Provisions. This clause 14 continues in force even where the Agreement has been fully performed, terminated or rescinded or where the parties or any of them have been discharged from the obligation to further perform the Agreement for any reason. The obligations with respect to dispute resolution outlined in this Article shall survive termination or expiration of this Agreement. This clause 14 applies even where the Agreement is otherwise void or voidable.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, disputes are resolved through a panel of three arbitrators. The American Arbitration Association (AAA) provides both parties with a list of at least ten arbitrator candidates from the AAA Franchise Panel, including a brief description of their backgrounds and experience.
Within seven calendar days of receiving the list, each party may select one arbitrator. The two party-appointed arbitrators then choose a third arbitrator to act as the Chairperson of the panel. This process ensures that both Chatime and the franchisee have a say in who resolves their disputes.
The arbitrator has the authority to manage the proceedings, including requiring parties to provide security for fees and expenses. However, the arbitrator cannot force a party to provide security for the other party's costs. The arbitrator must include findings on material questions of law and fact in the arbitration award, referencing the evidence used to base these findings. An arbitration initiated by a Developer can only be brought by a single franchisee or developer, and shall only resolve the claims by the Developer. Developer is not permitted to bring or participate in any group, collective, multi-party, or class action claims against Franchisor or its Affiliates or their respective owners and officers. An Arbitrator shall not have authority to decide any group, collective, multi-party or class action claims against Franchisor or its Affiliates or their respective owners and officers.
All arbitration proceedings are strictly confidential, ensuring that everything discussed before the arbitrator remains private and in closed session. The fees and expenses of the arbitration can be awarded to the prevailing party. If not awarded, each party bears their own fees, costs, and expenses, and the charges of the arbitration service and arbitrator are split between the parties.