factual

If mediation fails to resolve a dispute with Chicken Guy, what is the next step?

Chicken_Guy Franchise · 2025 FDD

Answer 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.
  • B. Arbitration. Subject to Section 22.A., Chicken Guy and Developer 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 22.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

Source: Item 23 — RECEIPTS (FDD pages 50–286)

What This Means (2025 FDD)

According to Chicken Guy's 2025 Franchise Disclosure Document, if mediation does not resolve a dispute, the next step is arbitration. Chicken Guy and the developer agree to submit any claim, controversy, or dispute arising out of the agreement or the relationship of the parties to binding arbitration. This arbitration will be conducted through the American Arbitration Association (AAA) and follow its then-current rules for commercial arbitration.

The arbitration proceedings will involve 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 covers a wide range of disputes, including those related to the agreement itself, the relationship between the parties, the validity of the agreement, and any aspect of the Chicken Guy system or standards.

This means that franchisees must be prepared to resolve disputes through arbitration, which is generally faster and less expensive than litigation but involves limited rights to appeal. Franchisees should also note that the arbitration will take place in the city where Chicken Guy's principal offices are located, potentially requiring them to travel for the proceedings. Understanding these dispute resolution steps is crucial for any prospective Chicken Guy franchisee.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.