If Chatime franchisees cannot agree on a mediator, how is one appointed?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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, if a dispute arises and the parties cannot agree on a mediator within 30 days of the Notice of Dispute, either party has the option to submit the matter to the American Arbitration Association (AAA). The AAA will then appoint a mediator under its mediation rules from the AAA Franchise Panel.
This process ensures that there is a mechanism for selecting a mediator even if the franchisee and Chatime cannot come to an agreement. This is a standard practice in franchising, as it prevents one party from blocking the mediation process and allows for a neutral third party to help resolve the dispute.
The mediation may occur via videoconference unless both parties agree to a different location. The mediator will determine the date and time for the mediation, and both parties are required to attend and make reasonable efforts to resolve the dispute. The costs of the mediation will be shared equally between the parties, while each party bears its own costs for attending and preparing for the mediation. It is important to note that the mediator does not have the power to make any binding decisions on the parties.
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 arbitration will take place in New York, New York, and parties and witnesses can appear by videoconference unless otherwise agreed.