How many arbitrators will conduct the arbitration proceedings between Chicken Guy and the franchisee?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 50)
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 means that if a franchisee and Chicken Guy have a disagreement that escalates to arbitration, only one person will be responsible for hearing the case and making a final, binding decision.
This arrangement is fairly common in franchise agreements, as using a single arbitrator is generally less expensive and faster than using a panel of arbitrators. However, it also means that the decision rests solely on the judgment of one individual, which could be seen as a higher risk for both the franchisee and Chicken Guy. Franchisees should consider this when evaluating the dispute resolution process outlined in the franchise agreement.
Prospective franchisees should be aware that the arbitrator's decision is binding, and the location of the arbitration will be in the city where Chicken Guy's principal offices are located. It is important to understand the implications of this arrangement and how it might affect the franchisee's ability to resolve disputes with Chicken Guy.