In arbitration with Chicken Guy, what rules define a compulsory counterclaim?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Chicken Guy and Franchisee further agree that, in connection with any such arbitration proceeding, each must submit or file any claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding as the claim to which it relates.
Any such claim which is not submitted or filed as described above will be forever barred.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, any claim that would constitute a compulsory counterclaim must be submitted or filed within the same arbitration proceeding as the original claim. The FDD specifies that Rule 13 of the Federal Rules of Civil Procedure defines what constitutes a compulsory counterclaim. Failure to submit the counterclaim in the same proceeding will result in the claim being permanently barred.
This means that if a Chicken Guy franchisee has a claim against Chicken Guy that arises out of the same transaction or occurrence as Chicken Guy's claim against them, the franchisee must raise it during the arbitration. Otherwise, the franchisee will lose the right to pursue that claim in the future. This rule is designed to promote efficiency and prevent multiple lawsuits arising from the same set of facts.
For a prospective Chicken Guy franchisee, it is crucial to understand this requirement. If Chicken Guy initiates arbitration, the franchisee should carefully assess whether they have any potential counterclaims. Seeking legal counsel to identify and properly assert any compulsory counterclaims is advisable to avoid losing those claims. This clause underscores the importance of being proactive and thorough in protecting one's legal rights when facing a dispute with Chicken Guy.