Is the dispute resolution by arbitration for Clear Pest Pros subject to state law?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise agreement | Summary | |
|---|---|---|---|
| t. | Integration/merger clause | Section 15.L | Only the terms of the Franchise Agreement are binding (subject to state law). Any representations or promises outside of the disclosure document and Franchise Agreement may not be enforceable. Notwithstanding the foregoing, nothing in any agreement or any related agreement is intended to disclaim the representations made in this Franchise Disclosure Document, its exhibits and amendments. |
| u. | Dispute resolution by arbitration | Sections 15.F.1 and 15.F.2 | You must bring any disputes arising out of the Franchise Agreement or any other agreement with us to our President prior to bringing a claim before any third party in an attempt to resolve the dispute internally. After exhaustion of this internal dispute resolution procedure, at our option, all claims or disputes between you and us must be submitted first to binding arbitration in Ann Arbor, Michigan, in accordance with the American Arbitration Association's Commercial Arbitration Rules then in effect (subject to state law). |
| v. | Choice of forum | Section 15.F.3 | All claims not subject to arbitration must be commenced in the state or federal court of general jurisdiction, in Washtenaw County, Michigan or the United States District Court for the Eastern District of Michigan (subject to state law). |
| w. | Choice of law | Section 15.H | Except for federal law, Michigan law applies (subject to state law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION. (FDD pages 58–63)
What This Means (2025 FDD)
According to Clear Pest Pros's 2025 Franchise Disclosure Document, the dispute resolution by arbitration is subject to state law. Specifically, Item 17 outlines that after exhausting an internal dispute resolution procedure with Clear Pest Pros's President, any claims or disputes must be submitted to binding arbitration in Ann Arbor, Michigan, following the American Arbitration Association’s Commercial Arbitration Rules. However, this process is explicitly noted as being 'subject to state law.'
This means that while Clear Pest Pros prefers arbitration as the primary method for resolving disputes, state laws could potentially influence or modify the arbitration process. These state laws might cover aspects such as the enforceability of arbitration agreements, the scope of arbitrable issues, or the procedures and standards that the arbitration must follow. Franchisees should be aware that the specific state laws applicable to their franchise location could impact how disputes with Clear Pest Pros are handled.
Furthermore, the FDD also indicates that the choice of forum and choice of law are 'subject to state law'. This means that any claims not subject to arbitration must be commenced in the state or federal court of general jurisdiction, in Washtenaw County, Michigan or the United States District Court for the Eastern District of Michigan, unless state law dictates otherwise. Similarly, except for federal law, Michigan law applies, unless state law dictates otherwise. Therefore, prospective franchisees should consult with a legal professional to understand how these provisions, particularly the arbitration clause, are affected by the laws of their specific state.