How many arbitrators will conduct the arbitration proceedings between Chicken Guy and the Developer?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
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, any disputes that cannot be resolved through mediation will be submitted to binding arbitration. The arbitration proceedings will be conducted by a single arbitrator. This arbitrator is selected according to the then-current rules for commercial arbitration of the American Arbitration Association (AAA). The arbitration will occur in the city where Chicken Guy's principal offices are located when the demand for arbitration is filed. The arbitrator cannot choose a different hearing location.
This means that if a Chicken Guy franchisee has a dispute with the company that escalates to arbitration, only one person will be responsible for hearing the case and making a binding decision. This is a common practice in franchising, as using a single arbitrator is typically less expensive and faster than using a panel of arbitrators. However, it also means that the outcome of the arbitration will depend heavily on the skills and impartiality of that single individual.
Prospective Chicken Guy franchisees should understand that they are agreeing to resolve disputes through a single arbitrator, which has pros and cons. While it may be a more streamlined process, it also concentrates decision-making power in one person. Franchisees may want to research the AAA's rules for commercial arbitration to understand how arbitrators are selected and what qualifications they typically have.