What happens to any compulsory counterclaim that is not submitted or filed as described in the arbitration proceeding involving Chicken Guy?

According to Chicken Guy's 2025 Franchise Disclosure Document, if a claim that would constitute a compulsory counterclaim, as defined by Rule 13 of the Federal Rules of Civil Procedure, is not submitted or filed within the same arbitration proceeding as the original claim to which it relates, it will be permanently barred. This means a Chicken Guy franchisee must bring all related claims in the initial arbitration, or they lose the right to bring them in the future.

This requirement is significant because it forces franchisees to be diligent and comprehensive in presenting their legal positions during arbitration. Failure to raise a compulsory counterclaim at the appropriate time can result in the franchisee losing the ability to pursue that claim later, even if it has merit. This could have substantial financial or legal consequences for the franchisee.

For a prospective Chicken Guy franchisee, this clause underscores the importance of thoroughly assessing any potential claims they might have against Chicken Guy before entering into arbitration. It would be prudent to consult with an attorney to identify all possible counterclaims and ensure they are properly raised during the arbitration process to avoid being permanently barred. This also highlights the importance of understanding Rule 13 of the Federal Rules of Civil Procedure, which defines what constitutes a compulsory counterclaim.