Where must disputes with Aerus be submitted for arbitration?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
| Category | Section in Agreement | Summary |
|---|---|---|
| the System or any of the Products, or with our, or any of our affiliates', now existing or future developed businesses or systems. | ||
| r. Non-competition covenants after the franchise is terminated or expires | Section 6 and 15.E | For a 1-year period following termination, expiration or transfer of the franchise (or transfer of an ownership interest in the franchise entity, as applicable) you and your principals may not: promote the sale of, or sell, directly or indirectly, any floor care, air or water products or other products and services which are similar in nature to, or which are competitive substitutes for, the Products and may not undertake or participate in any business or activity which is competitive in nature with the System or any of the Products, or with our, or any of our affiliates', now existing or future developed businesses or systems. |
| s. Modification of the | Section 21 | Franchise Agreement may not be modified unless |
| Agreement | mutually agreed to in writing and signed by both parties. | |
| t. Integration/merger clause | Section 21.A | The Franchise Agreement, together with the Manuals, constitutes the entire agreement and understanding of the parties. Only the terms of the Franchise Agreement are binding (subject to state law). Any representations or promises made outside the Disclosure Document and Franchise Agreement may not be enforceable. No claim made in any Franchise Agreement is intended to disclaim the express representations made in this Franchise Disclosure Document. |
| u. Dispute resolution by arbitration or mediation | Sections 3, 6, 16 and 19 | Except as otherwise provided in the case of injunctive relief, all disputes must be arbitrated before litigation may be brought. We will not be liable in an amount greater than the Standard Allocation paid during the prior 6 months. |
| v. Choice of forum | Section 16 | Disputes must be submitted to arbitration before a single arbitrator in Dallas, Texas. If an award of $100,000 or more is rendered, it may be vacated by the party against whom it is rendered and submitted to a federal or state court, pr |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 56–60)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, disputes with Aerus must be submitted to arbitration in Dallas, Texas. Specifically, the FDD states that disputes will be heard before a single arbitrator in Dallas. This means that if a franchisee has a disagreement with Aerus that cannot be resolved informally, the franchisee will likely need to travel to Dallas, Texas, to participate in the arbitration proceedings.
However, there is an exception to this rule. If the arbitration award is $100,000 or more, the party against whom the award is rendered has the option to vacate the arbitration decision and submit the dispute to a federal or state court. This provides a potential avenue for appealing a large arbitration award. Additionally, the FDD notes that the law of the franchisee's state may require local law and venue to apply, which could override the requirement to arbitrate in Dallas, Texas. This caveat suggests that state laws regarding arbitration and venue may take precedence over the terms outlined in the franchise agreement.
It's important for prospective Aerus franchisees to understand these dispute resolution procedures, as they can significantly impact the cost and location of resolving any conflicts with the franchisor. Franchisees should consult with legal counsel to fully understand their rights and obligations regarding arbitration and choice of venue, considering the laws of their specific state.