Is attendance at mediation binding on both Chicken Guy and the franchisee once a dispute is submitted?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
If these methods fail, Chicken Guy and Franchisee agree to submit any claim, controversy, or dispute arising out of this Agreement or the relationship of the parties to non-binding mediation conducted by the American Arbitration Association (the "AAA") and in accordance with its then-current rules for
commercial mediation. Once either party has submitted a dispute to mediation, the obligation to attend will be binding on both parties. Both parties must sign a confidentiality agreement before participating in any mediation proceeding. The mediation will take place in the city where Chicken Guy's principal offices are located at the time the demand for mediation is filed. If a dispute cannot be resolved through mediation, the parties agree to submit the dispute to arbitration, subject to the terms and conditions of Section 31.B.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, once either party submits a dispute to mediation, both Chicken Guy and the franchisee are obligated to attend. This means that after a dispute arises from the franchise agreement or the relationship between the parties, and either Chicken Guy or the franchisee initiates mediation, attendance becomes mandatory for both.
This obligation ensures that both parties actively participate in attempting to resolve the dispute through mediation, which is a non-binding process conducted by the American Arbitration Association (AAA). Both parties are also required to sign a confidentiality agreement before participating in any mediation proceeding. The mediation will be held in the city where Chicken Guy's principal offices are located when the demand for mediation is filed.
If mediation fails to resolve the dispute, the parties are then required to submit the dispute to arbitration, according to the terms and conditions outlined in Section 31.B of the franchise agreement. This structured approach—mediation followed by arbitration—aims to provide a fair and systematic way to address and resolve conflicts that may arise during the franchise relationship. While mediation itself is non-binding, the agreement to attend mediation is a binding obligation once initiated.