What is the impact of the Federal Arbitration Act on Chicken Guy's arbitration process?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
- (1) The arbitrator will have the right to award or include in the award any relief which the arbitrator deems proper under the circumstances, including, without limitation, money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief, and reasonable attorneys' fees and costs, provided that the arbitrator will not have the right to amend or modify the terms of this Agreement, declare any Proprietary Marks generic or otherwise invalid, or award any punitive or exemplary damages against either party (Chicken Guy and Developer hereby waiving to the fullest extent permitted by law any right to or claim for any punitive or exemplary damages against the other).
The award and decision of the arbitrator will be conclusive and binding upon all parties, and judgment upon the award may be entered in any court of competent jurisdiction.
- (2) Chicken Guy and Developer agree to be bound by the provisions of any limitation on the period of time in which claims must be brought under applicable law.
Chicken Guy and Developer further agree that, in connection with any such arbitration proceeding, each must submit or file any claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding as the claim to which it relates.
Any such claim which is not submitted or filed as described above will be forever barred.
The arbitrator may not consider any settlement discussions or offers that might have been made by either party.
- (3) Chicken Guy and Developer agree that arbitration will be conducted on an individual, not a class-wide, basis, and that an arbitration proceeding between Chicken Guy and Developer and their respective affiliates, owners, shareholders, officers, directors, agents, and/or employees may not be consolidated with any other arbitration proceeding involving Chicken Guy and Developer and another party.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the Federal Arbitration Act (FAA) governs all matters relating to arbitration. This means that the FAA, not state arbitration laws, dictates the procedures and rules for arbitrating disputes between Chicken Guy and its franchisees.
The FAA ensures that arbitration agreements are generally enforceable, which means a franchisee is bound to resolve disputes through arbitration rather than through lawsuits in court. The arbitrator in a Chicken Guy case has broad authority to award relief, including monetary damages, specific performance, injunctive relief, and reasonable attorney's fees and costs. However, the arbitrator cannot amend the franchise agreement, declare trademarks invalid, or award punitive damages.
Both Chicken Guy and the franchisee must adhere to any legal limitations on the time period for bringing claims. They must also submit any compulsory counterclaims within the same arbitration proceeding, or those claims will be forfeited. The arbitrator is prohibited from considering any settlement discussions or offers made by either party during the arbitration. Furthermore, arbitration will be conducted on an individual basis, and class-wide arbitrations or consolidated proceedings are not permitted.