Who determines if a controversy is arbitrable in a Chatime franchise dispute?

According to Chatime's 2025 Franchise Disclosure Document, any dispute regarding whether a controversy, claim, cause of action, or dispute is subject to arbitration will be determined through arbitration. This means that the arbitrator, not a court, will decide if a particular issue falls under the arbitration clause in the franchise agreement.

This is a common practice in franchise agreements, as it keeps the resolution of disputes within the arbitration process, potentially streamlining conflict resolution. However, it also means that a franchisee might be compelled to arbitrate even the question of whether arbitration is the right venue, giving significant power to the arbitrator.

For a prospective Chatime franchisee, this clause emphasizes the importance of understanding the scope of the arbitration agreement. It is crucial to carefully review the types of disputes that are subject to arbitration, as determined by the agreement, because even disagreements about the applicability of arbitration itself will be decided through arbitration. Franchisees should seek legal counsel to fully understand the implications of this provision.