What page in the Chatime FDD discusses dispute resolution for Chatime franchisees?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
Exhibit B to the Franchise Disclosure Document CHATIME FRANCHISE AGREEMENT
Chatime Franchise Agreement (United States of America)
Parties: Chatime Franchise, LLC (Franchisor)
Franchisee specified in Schedule 1 (Franchisee)
Guarantors specified in Schedule 1 (Guarantor)
Contents
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, dispute resolution is discussed on page 75, as indicated by the exhibit displaying the Chatime Franchise Agreement's contents. Clause 16 within the franchise agreement 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, potentially involving the American Arbitration Association (AAA). Should mediation fail, the agreement stipulates that disputes will be resolved through binding arbitration, governed by the Federal Arbitration Act and the Commercial Arbitration Rules of the AAA.
This multi-tiered approach—notice, mediation, and then arbitration—is a fairly standard process in franchise agreements, designed to encourage resolution at the lowest possible cost. Mediation offers a non-binding way for parties to find common ground, while arbitration provides a final, binding decision. However, franchisees should be aware that arbitration clauses often limit their ability to sue in court, which may have implications for their legal rights.
For prospective Chatime franchisees, understanding this dispute resolution process is crucial. It dictates how disagreements with Chatime will be handled, potentially impacting both time and expenses. Franchisees should carefully review Clause 16 and consider seeking legal counsel to fully understand their rights and obligations in case a dispute arises.