In the event of a dispute with Chicken Guy, what initial steps are the parties obligated to take before mediation?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Mediation. Except as provided with respect to injunctive relief as set forth in this Agreement, in the event of any dispute arising from or in connection with this Agreement or the breach thereof or the relationship of the parties, the parties shall use their best efforts to settle the dispute by consulting and negotiating with each other in good faith to attempt to reach a solution satisfactory to both parties. If these methods fail, Chicken Guy and Developer 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 22.B.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, in the event of a dispute arising from the franchise agreement, both parties are initially obligated to engage in good faith negotiations to try and resolve the issue. This involves consulting and negotiating with each other to find a mutually agreeable solution.
If these initial negotiations fail to produce a resolution, Chicken Guy and the franchisee must then submit the dispute to non-binding mediation. This mediation is to be conducted by the American Arbitration Association (AAA) and will follow their rules for commercial mediation that are current at the time. Both parties are obligated to attend the mediation once either party has submitted the dispute for mediation. Prior to participating in the mediation, both Chicken Guy and the franchisee must sign a confidentiality agreement.
The mediation will occur in the city where Chicken Guy's principal offices are located when the demand for mediation is filed. If mediation does not resolve the dispute, the parties are then required to submit the dispute to arbitration, according to the terms and conditions outlined in Section 22.B of the franchise agreement.