What is the required action if a dispute arises relating to the Chatime agreement?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
requirements for Franchisee to maintain its right to continue operating the Franchised Business. Franchisor's exercise of any of these other remedies shall not in any way impair or waive Franchisor's right in the future to terminate the Agreement or to exercise any other rights under this Agreement.
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, sha
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 relating to the franchise agreement, the party raising the issue must first provide a formal written notice of the dispute to the other party. This notice must specifically detail the nature of the dispute and state that the party wants to resolve it through the procedures outlined in the franchise agreement.
Following the notice, Chatime and the franchisee have 30 days to try and resolve the dispute between themselves. If they cannot reach a resolution within this period, either party has the option to refer the matter to mediation. If both parties cannot agree on a mediator, either party can request the American Arbitration Association (AAA) to appoint one from its Franchise Panel, following AAA's mediation rules.
Mediation can occur via videoconference unless both parties agree to a different location. Both parties must attend the mediation and make reasonable efforts to resolve the dispute. All discussions during mediation are confidential and without prejudice, and documents created specifically for mediation cannot be used in later litigation. The mediator is expected to handle the matter expeditiously, aiming for resolution within 30 business days of the referral. The costs of mediation are shared equally, but each party bears its own expenses for attending and preparing for the mediation. The mediator does not have the power to make any binding decisions on the parties. If mediation fails, the dispute will be settled through binding arbitration, governed by the Federal Arbitration Act and the Commercial Arbitration Rules of the AAA.