Regarding Hck Hot Chicken, is arbitration the required method for resolving all disputes?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Mediation shall be conducted in the JAMS office closest to our principal place of business (currently Sarasota, FL) and shall be conducted and completed within 45 days following the date either party first gives notice of mediation.
If the parties fail to fully resolve such dispute through mediation within such 45-day period, either party may initiate arbitration.
The fees and expenses of the mediator shall be shared equally by the parties.
The mediator shall be disqualified as a witness, expert or counsel for any party with respect to any suit and any related matter.
The entire mediation process shall be confidential and the conduct, statements, promises, offers, views and opinions of the mediator and the parties shall not be discoverable or admissible in any legal proceeding for any purpose except as required by Applicable Law, including required disclosure in Franchisor's franchise disclosure document, and provided, however, that evidence which is otherwise discoverable or admissible shall not be excluded from discovery or admission as a result of its use in the mediation.
- 10.2 Arbitration.
If the parties cannot fully resolve and settle a dispute through mediation as set forth in Section 10.1, all unresolved issues involved in the dispute, including any controversy or claim between Franchisor and Area Developer arising out of or relating to this Development Agreement or any alleged breach hereof, and any issues pertaining to the arbitrability of such controversy or claim and any claim that this Development Agreement or any part hereof is invalid, illegal, or otherwise voidable or void, shall be submitted to binding arbitration.
Said arbitration shall be conducted before and will be heard by three arbitrators in accordance with the then-current Rules of Practice and Procedure of JAMS.
If JAMS or any successor thereto, is no longer in existence at the time arbitration is commenced, Franchisor and Area Developer will agree on another arbitration organization to conduct the arbitration proceeding.
Judgment upon any award rendered may be entered in any Court having jurisdiction thereof.
Except to the extent prohibited by Applicable Law, the proceedings shall be held in the principal city closest to Franchisor's
Source: Item 23 — RECEIPTS (FDD pages 55–245)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, if mediation does not fully resolve a dispute, binding arbitration is required. The arbitration will be conducted by three arbitrators following the rules of JAMS (Judicial Arbitration and Mediation Services). If JAMS is no longer available, Hck Hot Chicken and the Area Developer will choose another arbitration organization. The proceedings will take place in the principal city closest to Hck Hot Chicken's principal place of business. A court can then enter a judgment based on the arbitration award.
Prior to arbitration, Hck Hot Chicken requires disputes to undergo mediation. The mediation will occur at the JAMS office closest to Hck Hot Chicken's principal place of business, which is currently Sarasota, FL. The mediation must be completed within 45 days of notice. The costs of the mediator are to be split equally between the parties. The mediator is disqualified from being a witness, expert, or counsel in any related suit. The mediation process is confidential, with conduct, statements, and opinions being inadmissible in legal proceedings, except as required by law or for evidence that is otherwise discoverable.
This mandatory arbitration clause means that franchisees waive their right to sue Hck Hot Chicken in court and instead must resolve disputes through a private arbitration process. While arbitration can sometimes be faster and less expensive than litigation, it also has potential drawbacks, such as limited discovery and appeal rights. Franchisees should be aware of these implications before signing the franchise agreement. It is typical in the franchise industry for franchise agreements to contain clauses requiring arbitration.