What code of procedure will be used to conduct arbitration for Southern Steer disputes?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
If the Franchisee fails to give the Franchisor written notice of the asking price for the Major Assets and/or if the Franchisor and the Franchisee cannot agree on the price of the Major Assets, then either party will have the right to demand that the price of the Major Assets be determined by arbitration conducted in Clearwater, Florida in accordance with the Code of Procedure For Resolving Business-to-Business Disputes of the Forum (www.adrforum.com) ("Code of Procedure").
The arbitration hearing will be held as soon as
possible, but in no event later than seven business days after the date arbitration is demanded by either party.
The arbitrator will not consider any value for goodwill associated with the name "Southern Steer Butcher" in determining the fair market value of the Major Assets since the right of purchase granted to the Franchisor pursuant to this provision applies only after this Agreement has expired or been terminated or the Franchisee has ceased doing business.
The Arbitrator may not include the value of the Lease for the Franchised Location if the Franchisor gives the Arbitrator written notice that it intends to exercise its right to assume the Lease under Section 26 of this Agreement.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, disputes regarding the price of Major Assets that cannot be resolved between the franchisee and Southern Steer will be determined by arbitration. This arbitration will take place in Clearwater, Florida. The specific code of procedure to be followed is the "Code of Procedure For Resolving Business-to-Business Disputes of the Forum," which can be found at www.adrforum.com.
This means that if a Southern Steer franchisee and the franchisor disagree on the value of significant assets during a potential sale, a formal arbitration process will be used to establish the price. This process is governed by a specific set of rules designed for business-to-business disputes, ensuring a structured and potentially more predictable resolution.
It is important to note that the arbitrator will not consider any value for goodwill associated with the name "Southern Steer Butcher" when determining the fair market value of the Major Assets. Additionally, the arbitrator may not include the value of the Lease for the Franchised Location if Southern Steer intends to exercise its right to assume the Lease under Section 26 of the agreement. This could significantly impact the valuation of the assets and the final purchase price.
Prospective franchisees should review the Code of Procedure For Resolving Business-to-Business Disputes of the Forum to fully understand the arbitration process, rules, and potential costs associated with resolving such disputes. Understanding these procedures is crucial for making informed decisions about entering into a franchise agreement with Southern Steer.