What happens to the fees and expenses of the Chatime arbitration proceeding?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the fees and expenses of the arbitration proceeding can be awarded by the arbitrator to the prevailing party. This means that if Chatime wins the arbitration case, the franchisee may be responsible for covering Chatime's legal fees and other associated costs. Conversely, if the franchisee wins, Chatime may have to cover those expenses.
However, if the arbitrator does not award the fees and expenses to the prevailing party, then each party is responsible for their own fees, costs, and expenses. In this scenario, the charges of the arbitration service and the arbitrator will be split between Chatime and the franchisee. This arrangement is fairly standard in franchise agreements, as it ensures both parties share the financial burden of the arbitration process if neither party is deemed clearly at fault.
During the arbitration, the arbitrator has the authority to require either party to provide security or additional security to cover the arbitrator's anticipated fees and expenses. However, the arbitrator cannot force one party to provide security for the other party's arbitration costs. This measure helps ensure that the arbitrator will be compensated for their time and effort, regardless of the outcome of the arbitration. Prospective franchisees should be aware of these potential costs and factor them into their financial planning when considering a Chatime franchise.