Litigation is the proceedings in the local courts to defend or enforce the legal rights with help of an attorney.
The dispute will go in the hands of the litigation or arbitration after direct negotiation and mediation failure. However to proceed with arbitration the parties must have agreed to arbitration proceedings in the contract if not then the local courts or litigation is the option to resolve their dispute.
There can be an exception if both parties commit to proceed with arbitration even if not mentioned in the contract can do so but to be precise it is impossible because of damaged goodwill.
For international disputes such as franchise, both parties don’t prefer the litigation method as it might be biased in their proceedings. The local court proceedings favor one party in different ways such as language, procedures, and the advocates.
In litigation, the stronger party is, of course, the locals which is why most parties don’t agree with the litigation method and end up with arbitration for their disputes.