Where in the Chatime FDD can I find details about dispute resolution?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: Receipts]
16 Dispute Resolution
- 16.1 Notice of Dispute. If a dispute arises relating to or in connection with this Agreement or the relationship of the parties ("Dispute"), a party to the Dispute must give to the other party or parties to the dispute notice specifying the dispute and requiring its resolution under this clause 16 ("Notice of Dispute").
- 16.2 Mediation. If the parties cannot resolve their Dispute within 30 days from the date of service of the Notice of Dispute, either party may refer the matter to a mediator and if the parties cannot agree upon the appointment of a mediator, either party may submit the matter to the American Arbitration Association ("AAA") and obtain the appointment of a mediator under the AAA mediation rules from the AAA Franchise Panel.
- (1) The mediation may take place by videoconference, unless the parties agree upon a different location. The mediator may decide the date and time for mediation and the parties will attend the mediation and use reasonable endeavors to resolve the dispute.
- (2) The parties to the mediation agree that: everything that occurs before the mediator will be in confidence and in closed session; all discussions will be without prejudice; and no documents brought into existence specifically for the purpose of the mediation process will be called into evidence in any subsequent litigation by either of the parties. The mediator will deal with any matter as expeditiously as possible by no later than 30 Business Days after referral to the mediator.
- (3) The parties to the mediation will bear the costs of the mediation on an equal basis. Each party will bear its own costs of attending and preparing for the mediation.
- (4) The mediator will have no power to make any decision binding on the Parties to resolve the dispute.
- 16.3 Arbitration. Except as otherwise provided in this Agreement, if the mediation is not successful, any controversy, claim, cause of action or dispute arising out of, or relating to this Agreement or related
agreements, or the relationship of the parties, shall be resolved exclusively by binding arbitration.
- (1) The right and duty of the parties to this Agreement to resolve any disputes by arbitration shall be governed exclusively by the Federal Arbitration Act, as amended, and arbitration shall be conducted pursuant to the then-prevailing Commercial Arbitration Rules of the AAA.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Item 23 refers to receipts and includes information regarding dispute resolution in section 16. This section outlines the process for resolving disputes, starting with a Notice of Dispute. If the parties cannot resolve the dispute within 30 days, they may proceed to mediation. If mediation is unsuccessful, the dispute will be resolved through binding arbitration, governed by the Federal Arbitration Act and the Commercial Arbitration Rules of the AAA.
The mediation process detailed in the Chatime FDD involves several key aspects. The mediation can occur via videoconference unless both parties agree to a different location. The mediator determines the date and time, and both parties are expected to attend and make reasonable efforts to resolve the dispute. All discussions and documents created for mediation are confidential and cannot be used in later litigation. The mediator is expected to handle the matter expeditiously, aiming for resolution within 30 business days after the referral.
The costs associated with mediation are shared equally between the parties, although each party bears its own expenses for attending and preparing for the mediation. Importantly, the mediator does not have the power to make any binding decisions. If mediation fails, the dispute proceeds to binding arbitration. This arbitration is conducted in accordance with the Federal Arbitration Act and the Commercial Arbitration Rules of the AAA. For franchisees, understanding these dispute resolution steps is crucial, as it outlines the required processes for addressing conflicts with Chatime.