Where must disputes with Chem Dry be arbitrated, according to the Franchise Agreement?

According to Chem Dry's 2024 Franchise Disclosure Document, disputes between the franchisee and Chem Dry must be arbitrated in Nashville, Tennessee. Specifically, Section 17F of the Franchise Agreement states that, with the exception of certain claims, all disputes must be arbitrated in Nashville, Tennessee, subject to state law. Chem Dry maintains its right to enforce the arbitration provision, including the Tennessee forum selection provision, in any dispute, notwithstanding any state law to the contrary, relying on the Federal Arbitration Act.

This means that if a Chem Dry franchisee has a dispute with the company that cannot be resolved informally, the franchisee will likely have to travel to Nashville, Tennessee to resolve the issue through arbitration. Arbitration is a form of alternative dispute resolution where a neutral third party hears both sides of the argument and makes a decision. This decision is often binding, meaning that both parties must abide by it.

While the Franchise Agreement mandates arbitration in Nashville, Tennessee, it is subject to state law. This means that certain state laws may override the arbitration provision in the Franchise Agreement. Additionally, either the franchisee or Chem Dry can pursue monetary claims for liquidated amounts in litigation instead of arbitration. However, if the defendant initiates arbitration of any counterclaim or underlying dispute, the litigation must be dismissed, and the arbitration will be the means of dispute resolution.

It is important for prospective Chem Dry franchisees to understand the dispute resolution process outlined in the Franchise Agreement. Franchisees should consult with an attorney to fully understand their rights and obligations under the Franchise Agreement, including the arbitration provision and its implications.