Under what condition can a party recover costs and expenses in an Hck Hot Chicken arbitration?

According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the substantially prevailing party in an arbitration will recover its actual costs and expenses from the other party. This includes arbitrator's fees and expenses, as well as attorney fees and expenses, incurred in connection with the dispute. The arbitration decision will specify that the substantially prevailing party is entitled to these costs and expenses.

This means that if a Hck Hot Chicken franchisee or franchisor initiates arbitration and wins, they can recoup the costs associated with the arbitration process. This can include the fees paid to the arbitrators, as well as the legal fees for the attorneys representing them. This provision aims to alleviate the financial burden on the party that is ultimately successful in resolving the dispute through arbitration.

However, it's important to note that the arbitrators do not have the authority to award exemplary or punitive damages. 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 unless a party is deemed the substantially prevailing party. This clause encourages both parties to present a strong case, knowing that they could be responsible for the other party's expenses if they do not prevail.