What code of procedure governs the mediation process between Southern Steer and the Multi-Unit Developer?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
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, the agreement between Southern Steer and the Multi-Unit Developer recognizes the rights of both parties to exercise business judgment. In the event of a dispute requiring mediation, the mediator is affirmatively advised not to substitute their judgment for the business judgment exercised by either Southern Steer or the Multi-Unit Developer. This indicates that the mediation process respects the business decisions made by both parties based on their assessment of the long-term interests of the franchised system.
This clause emphasizes that Southern Steer and its Multi-Unit Developers have the autonomy to make strategic decisions for the benefit of the entire franchise network. The mediator's role is not to second-guess these decisions but to facilitate a resolution that respects the business acumen of both parties. This approach aims to prevent mediation from becoming a platform for challenging legitimate business strategies.
For a prospective Multi-Unit Developer, this provision offers assurance that their business decisions, if made with sound judgment, will be respected during mediation. However, it also implies that the Multi-Unit Developer should be prepared to justify their decisions based on reasonable business principles. This aspect underscores the importance of maintaining thorough documentation and a clear rationale for all strategic choices related to the development and operation of Southern Steer businesses.