Under the Clear Pest Pros Franchise Agreement, where must binding arbitration take place?
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). |
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, any disputes arising out of the Franchise Agreement must first be brought to the company President for internal resolution. After exhausting this internal process, Clear Pest Pros has the option to require that all claims or disputes between the franchisee and Clear Pest Pros be submitted to binding arbitration.
If Clear Pest Pros elects arbitration, the proceedings must take place in Ann Arbor, Michigan, and follow the American Arbitration Association's Commercial Arbitration Rules in effect at that time. This is subject to state law, meaning that specific state regulations might impact the arbitration process.
For a prospective Clear Pest Pros franchisee, this means that if a dispute arises and cannot be resolved internally, Clear Pest Pros can force the franchisee to participate in binding arbitration in Ann Arbor, Michigan. Arbitration is often seen as a quicker and less expensive alternative to litigation, but it limits the franchisee's ability to appeal decisions. Franchisees should be aware of this requirement and consider the potential costs and inconveniences of arbitrating disputes in Michigan, regardless of where their franchise is located. This is a fairly common practice in franchising, as it provides franchisors with a consistent and potentially more efficient way to resolve disputes.