If mediation fails, what is the next step in resolving a dispute with Chop5 Salad Kitchen?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
- 22.2. Arbitration. If the Dispute is not resolved by mediation within 60 days after either party makes a demand for mediation, the parties will submit the Dispute to mandatory and binding arbitration conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The party filing the arbitration must initially bear the cost of any arbitration fees or costs. The arbitrators will not have authority to award exemplary or punitive damages. Any Dispute involving an Excluded Claim will not be subject to mandatory arbitration.
- 22.3. Litigation. If a Dispute involves an Excluded Claim, then either party may file a lawsuit in any state or federal court of general jurisdiction in accordance the choice of venue provision set forth below. The parties hereby express their clear and unequivocal intent that a court, rather than a
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
According to the 2024 Chop5 Salad Kitchen Franchise Disclosure Document, if a dispute is not resolved through mediation within 60 days after a party demands mediation, the parties will submit the dispute to mandatory and binding arbitration. This arbitration will be conducted following the Commercial Arbitration Rules of the American Arbitration Association. The party initiating the arbitration is responsible for covering the initial arbitration fees and costs. However, the arbitrators are not authorized to award exemplary or punitive damages. Certain disputes, specifically those involving claims alleging a breach of §14 and/or §17, referred to as "Excluded Claims," are not subject to mandatory arbitration.
For a prospective Chop5 Salad Kitchen franchisee, this means that most disputes with the franchisor will first go through negotiation and then mediation. If mediation is unsuccessful within 60 days, the dispute will proceed to binding arbitration, which is a private process where a neutral arbitrator makes a decision that is legally binding on both parties. It is important to note that the franchisee will likely have to pay the initial costs of arbitration, although the final allocation of costs can be decided by the arbitrator.
However, certain types of claims, labeled as "Excluded Claims" (breaches of §14 and/or §17), are not subject to mandatory negotiation, mediation, or arbitration. For these excluded claims, either party can immediately file a lawsuit in a state or federal court. A prospective franchisee should carefully review Sections 14 and 17 of the franchise agreement to understand what types of disputes fall under these Excluded Claims and what their legal options would be in those situations. Understanding this dispute resolution process is crucial for any potential Chop5 Salad Kitchen franchisee.