If mediation fails, what is the next step in resolving disputes with Chicken Guy?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
nal, unappealable ruling issued by any court, agency or tribunal with valid jurisdiction in a proceeding to which Chicken Guy is a party, that ruling will not impair the operation of, or have any other effect upon, any other portions of this Agreement; all of which will remain binding on the parties and continue to be given full force and effect.
- B. No Third Party Beneficiaries. Except as otherwise provided in Section 26, nothing in this Agreement is intended, nor shall be deemed, to confer upon any person or legal entity other than Franchisee and Chicken Guy and its affiliates and such of their heirs, successors and assigns, any rights or remedies under or by reason of this Agreement.
- C. Modification to Scope of Covenants by Law. Franchisee expressly agrees to be bound by any promise or covenant imposing the maximum duty permitted by law that is subsumed within the terms of any provision of this Agreement, as though it were separately articulated in and made a part of this Agreement, that may result from striking from any of the provisions of this Agreement any portion or portions which a court may hold to be unreasonable and unenforceable in a final decision to which Chicken Guy is a party, or from reducing the scope of any promise or covenant to the extent required to comply with such a court order.
- D. Interpretation. No provision of this Agreement shall be interpreted in favor of, or against, any party because of the party that drafted this Agreement.
31. DISPUTES
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 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.
- B. Arbitration. Subject to Section 31.A., Chicken Guy and Franchisee agree that all controversies, disputes, or claims between the parties and their respective affiliates, owners, shareholders, officers, directors, agents, and/or employees arising out of or related to: (1) this Agreement; (2) the relationship between the parties; (3) the scope and validity of this Agreement or any provision of this Agreement (including the validity and scope of the arbitration obligations under this Section 31.B., which the parties acknowledge is to be determined by an arbitrator and not a court); or (4) any aspect of the System or any System standard must be submitted for binding arbitration, on demand of either party, to the AAA and in accordance with its then-current rules for commercial arbitration. The arbitration proceedings will be conducted by a single arbitrator. The arbitration will take place in the city where Chicken Guy's principal offices are located at the time the demand for arbitration is filed. The arbitrator will have no authority to select a different hearing locale other than as described in the prior sentence. All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) and not by any state arbitration law.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, if mediation is unsuccessful, the next step is binding arbitration. Chicken Guy and the franchisee must submit any unresolved claim, controversy, or dispute to the American Arbitration Association (AAA) for binding arbitration, following the AAA's then-current rules for commercial arbitration. This arbitration covers disputes related to the Franchise Agreement, the relationship between the parties, the validity of the agreement, or any aspect of the Chicken Guy system.
The arbitration proceedings will be conducted by a single arbitrator, and the location for the arbitration will be the city where Chicken Guy's principal offices are located when the demand for arbitration is filed. The arbitrator does not have the authority to select a different hearing location. This binding arbitration clause ensures that disputes are resolved outside of court, which can potentially save time and money for both parties.
However, there are exceptions. Chicken Guy can seek injunctive relief from a court of competent jurisdiction for breaches or threatened breaches of the agreement, such as those involving confidential information, proprietary marks, or post-termination obligations, without first going through mediation or arbitration, although they must contemporaneously submit the disputes for mediation and then arbitration on the merits if the disputes cannot be resolved through mediation. Additionally, if a court or arbitrator deems the arbitration clause unenforceable for a particular dispute, the dispute will be resolved in a judicial proceeding.