What rules of practice and procedure govern the arbitration process for Hck Hot Chicken?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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
principal place of business (currently Sarasota, FL). All arbitration proceedings and claims shall be filed and prosecuted separately and individually in the name of Area Developer and Franchisor, and not in any class action or representative capacity, and shall not be joined with or consolidated with claims asserted by or against any other area developer or franchisee. The arbitrators shall have no power or authority to grant punitive or exemplary damages as part of its award. In no event may the material provisions of this Development Agreement be modified or changed by the arbitrator at any arbitration hearing. The arbitration and the parties' agreement therefor shall be deemed to be self-executing, and if either party fails to appear at any properly noticed arbitration proceeding, an award may be entered against such party despite said failure to appear. All issues relating to arbitrability or the enforcement of the agreement to arbitrate contained herein shall be governed by the Federal Arbitration Act (9 U.S.C. § 1 et seq.), notwithstanding any provision of this Development Agreement specifying the state law under which this Development Agreement shall be governed and construed. Except as required by Applicable Law, including the required disclosure in Franchisor's franchise disclosure document, the entire arbitration proceedings and related documents are confidential. These matters will not be discoverable or admissible for any purposes, including impeachment, in any litigation or other proceeding involving the parties, and will not be disclosed to anyone who is not an agent, employee, expert witness, or representative for any of the parties; however, evidence otherwise discoverable or admissible is not excluded from discovery or admission as a result of its use in the arbitration. The fees of, and authorized costs incurred by, the arbitrator will be shared equally by the parties, and each party will bear all of its own costs of arbitration;
Source: Item 23 — RECEIPTS (FDD pages 55–245)
What This Means (2025 FDD)
According to the 2025 Hck Hot Chicken FDD, if mediation fails to resolve a dispute, binding arbitration will occur. This arbitration will be conducted before three arbitrators, following the then-current Rules of Practice and Procedure of JAMS (Judicial Arbitration and Mediation Services). If JAMS is no longer in existence, Hck Hot Chicken and the Area Developer will agree on another arbitration organization. The proceedings will be held in the principal city closest to Hck Hot Chicken's principal place of business, unless prohibited by law.
This means that prospective Hck Hot Chicken franchisees need to be aware that any unresolved disputes with the franchisor will be settled through arbitration, adhering to JAMS rules or those of a mutually agreed-upon organization. Franchisees should familiarize themselves with JAMS procedures to understand how the arbitration process works, including the selection of arbitrators, presentation of evidence, and applicable timelines. The location of the arbitration could also impact travel costs and convenience for the franchisee.
Furthermore, the FDD specifies that the arbitrators can award relief, including monetary damages, specific performance, injunctive relief, and attorneys' fees and costs, but they cannot award exemplary or punitive damages. The arbitration award is conclusive and binding, and each party waives the right to contest its validity or enforceability. Additionally, any claim that would constitute a compulsory counterclaim must be submitted within the same proceedings, or it will be barred. The deposition and discovery provisions of §1283.05 of the California Code of Civil Procedure are incorporated into the agreement.
It is also important to note that arbitration will be conducted on an individual basis, not as a class action, and consolidation with other arbitration proceedings is not permitted. However, Hck Hot Chicken retains the right to seek specific performance, temporary restraining orders, and injunctive relief from a court of competent jurisdiction, even during mediation or arbitration, to enforce restrictive covenants. This ensures Hck Hot Chicken can act quickly to protect its interests while still adhering to the arbitration process for resolving the underlying dispute.