Who benefits from the provisions of Section 14 of the Southern Steer agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to Section 14.4, "Dispute" means any disputes, controversies or claims between Franchisor, its Affiliate, shareholders, owners, officers, directors, agents, employees and attorneys (in their respective capacity) and Multi-Unit Developer and Controlled Entity (if any) and Multi-Unit Developer and Controlled Entity (if any)'s Operating Principal, Owners, Guarantors, Designated Manager(s), affiliates, officers, directors, agents and employees (collectively, "Parties") (a) arising out of or related to this Agreement or any other agreement between the Parties relating to the Southern Steer Business or the relationship of the Parties hereto; (b) the relationship of the Parties hereto; (c) the Multi-Unit Developer or Controlled Entity's development of Southern Steer Businesses; (d) the scope or validity of this Agreement or any other agreement between the Parties relating to the Southern Steer Business or the relationship of the Parties hereto or any provision thereof (including the validity and scope of the arbitration obligation, which Multi-Unit Developer and Controlled Entity (if any) and Franchisor acknowledge will be determined by an arbitrator and not a court, unless the arbitrator invalidates the Arbitration provision in its entirety, in which case, wither party has the right to appeal such invalidation to a court of competent jurisdiction).
- Business Judgment.
The Parties recognize and any mediator, arbitrator and judge is affirmatively advised, that certain provisions of this Agreement reflect rights of Franchisor and Multi-Unit Developer and Controlled Entity (if any) to take (or refrain from taking) certain actions in exercise of its business judgment based on its assessment of the long term interests of the franchised system as a whole.
Where such discretion has been exercised and is supported by the business judgment of Franchisor or Multi-Unit Developer and Controlled Entity (if any), a mediator, arbitrator or judge shall not substitute his or her judgment for the judgment so exercised by Franchisor or Multi-Unit Developer and Controlled Entity (if any).
Source: Item 5 — and 7 of the FDD, Section 3.1 of the Franchise Agreement and Section 4.1 of the Multi-Unit Development Agreement are hereby amended to state that payment of the initial franchise fee and development fee will be deferred until We have satisfied Our pre-opening obligations, and You have commenced business operations. (FDD pages 168–290)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, Section 14 outlines dispute resolution and business judgment parameters within the agreement. Specifically, Section 14.4 defines "Dispute" as encompassing disagreements between Southern Steer (including its affiliates, shareholders, officers, etc.) and the Multi-Unit Developer (including their controlled entities, operating principals, owners, guarantors, designated managers, etc.). This definition indicates that both Southern Steer and its franchisees (Multi-Unit Developers) are intended to benefit from the provisions related to dispute resolution.
The FDD also states that Section 14 acknowledges that certain provisions of the agreement reflect the rights of both Southern Steer and the Multi-Unit Developer to make business decisions based on their assessment of the long-term interests of the franchise system. It advises any mediator, arbitrator, and judge that these provisions reflect the rights of both the Franchisor and Multi-Unit Developer to take actions based on business judgment. This clause protects the business decisions of both parties from being second-guessed, provided those decisions are made in good faith for the benefit of the overall Southern Steer system.
In essence, Section 14 of the Southern Steer agreement aims to provide a framework for resolving disputes and ensuring that business decisions made by either the franchisor or the franchisee are respected, fostering a more stable and predictable business relationship. This benefits both Southern Steer and its Multi-Unit Developers by establishing clear guidelines for conflict resolution and operational autonomy.