Are Chem Dry franchisee owners and guarantors bound by the arbitration agreement?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
The Franchise Agreement requires binding arbitration. The arbitration will occur at Nashville, Tennessee or Salt Lake City, Utah with the costs being borne by equally by the parties.
rospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code section 20040.5, Code of Civil Procedure section 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside of the State of California.
SUBJECT TO SECTION 17.F. ABOVE AND THE PROVISIONS BELOW, FRANCHISEE AND ITS OWNERS AGREE THAT ALL ACTIONS ARISING UNDER THIS AGREEMENT OR OTHERWISE AS A RESULT OF THE RELATIONSHIP BETWEEN THE PARTIES MUST BE COMMENCED IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF TENNESSEE AND FRANCHISEE (AND EACH OWNER AND GUARANTOR OF FRANCHISEE) IRREVO
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the franchise agreement requires binding arbitration. The arbitration will occur in Nashville, Tennessee, or Salt Lake City, Utah, and the costs will be equally borne by the parties.
Furthermore, the document states that franchisees and their owners agree that all actions arising under the agreement or as a result of the relationship between the parties must commence in any state or federal court of competent jurisdiction in the State of Tennessee. It also specifies that each owner and guarantor of the franchisee is irrevocably subject to the personal jurisdiction of the Tennessee courts.
Prospective franchisees are encouraged to consult with legal counsel to determine the applicability of California and federal laws, such as the Federal Arbitration Act, to any provisions of a franchise agreement restricting venue to a forum outside of the State of California.