Which state's law governs the Chem Dry franchise agreement, as per Section 17H?

According to Chem Dry's 2024 Franchise Disclosure Document, Section 17H of the franchise agreement specifies that Tennessee law governs the agreement. However, this is subject to state law. The section also clarifies that monetary claims for liquidated amounts can be pursued through litigation instead of arbitration by either the franchisee or Chem Dry. If a defendant initiates arbitration for any counterclaim or underlying dispute, the litigation must be dismissed, and arbitration will become the means of dispute resolution.

This "choice of law" provision is a standard clause in franchise agreements. It means that Tennessee law will be used to interpret and enforce the agreement, which can be significant if disputes arise. However, the phrase "subject to state law" indicates that certain state-specific franchise laws where the franchisee operates may override the Tennessee law in some instances.

For a prospective Chem Dry franchisee, this means understanding both Tennessee law and the franchise laws of their own state. They should be aware that while Tennessee law generally applies, their local state laws might offer additional protections or have specific requirements that supersede the agreement's general choice of law. It is advisable to consult with a legal professional to fully understand the implications of this provision in their specific situation and location.