Under what circumstances related to monetary claims can either Chem Dry or the franchisee initiate litigation instead of arbitration?

According to Chem Dry's 2024 Franchise Disclosure Document, both Chem Dry and the franchisee have the option to initiate litigation instead of arbitration under specific circumstances related to monetary claims. Specifically, either party can pursue litigation for monetary claims involving liquidated amounts. This means that if the claim involves a clearly determined and fixed sum of money, either Chem Dry or the franchisee can choose to take the matter to court rather than go through arbitration. This is subject to state law.

However, this right is not absolute. If one party initiates litigation for a liquidated monetary claim, the other party (the defendant in the litigation) has the option to initiate arbitration. Should the defendant choose to pursue arbitration by filing a counterclaim or disputing the underlying issue, the litigation must be dismissed, and the dispute will then be resolved through arbitration. This provision ensures that while initial access to litigation is available for liquidated monetary claims, the ultimate method of dispute resolution can be shifted to arbitration at the defendant's discretion.

This clause provides flexibility in how monetary disputes are handled. It allows for quicker resolution of simple, undisputed monetary claims through litigation, while still providing a mechanism for comprehensive dispute resolution through arbitration if the defendant prefers that route. Prospective franchisees should understand this clause, as it outlines the initial steps and potential pathways for resolving financial disagreements with Chem Dry.