Under what condition does the arbitration clause not apply to a dispute with Cd One Price Cleaners?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing or anything to the contrary in this Section or Section 22.1, if any court or arbitrator determines that all or any part of the preceding sentence is unenforceable with respect to a dispute that otherwise would be subject to arbitration under this Section 23.2, then all parties agree that this arbitration clause shall not apply to that dispute and that such dispute shall be resolved in a judicial proceeding in accordance with this Article 23 (excluding this Section 23.2).
Source: Item 23 — Receipts (FDD pages 72–263)
What This Means (2025 FDD)
According to the 2025 FDD, the arbitration clause between Cd One Price Cleaners and the franchisee will not apply if a court or arbitrator determines that the clause requiring individual arbitration (and prohibiting class-wide arbitration) is unenforceable. In this case, the dispute will be resolved in a judicial proceeding.
This means that Cd One Price Cleaners franchisees typically must resolve disputes through individual arbitration, which is a private process outside of the court system. This clause aims to prevent franchisees from joining together in class-action lawsuits against the franchisor. However, if a court or arbitrator finds the ban on class-wide arbitration to be unenforceable, the franchisee can pursue the dispute in court.
For a prospective Cd One Price Cleaners franchisee, this is an important consideration. Arbitration is generally less expensive and faster than litigation, but it may limit the franchisee's ability to pursue certain legal claims. The franchisee should seek legal counsel to fully understand the implications of the arbitration clause and the conditions under which it may not apply.