Who bears the fees and costs of the arbitrator in Hck Hot Chicken arbitration?

According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the fees and authorized costs incurred by the arbitrator will be shared equally by both parties involved in the arbitration. Each party will initially bear their own costs of arbitration. However, the arbitration decision will stipulate that the substantially prevailing party will recover its actual costs and expenses from the other party. These recoverable costs and expenses include the arbitrator's fees and expenses, as well as attorney fees and expenses, incurred in connection with the dispute.

This means that while both Hck Hot Chicken and the franchisee will initially split the arbitrator's fees and cover their own legal costs, the party that wins the arbitration can recover these costs from the losing party. This provision aims to ensure that the financial burden of arbitration is ultimately borne by the party found to be in the wrong.

This arrangement is fairly common in franchise agreements, as it encourages both parties to present strong cases and discourages frivolous claims. However, it's important to note the term 'substantially prevailing party,' as the degree of success required to recover costs may be subject to interpretation by the arbitrator. A prospective Hck Hot Chicken franchisee should carefully consider the potential costs of arbitration and the implications of this fee-shifting provision.