What defenses does a Southern Steer associate voluntarily waive in litigation concerning enforcement of the franchisee's or franchisor's rights?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
(e) In any litigation, arbitration or other proceeding concerning enforcement of Franchisee's or Franchisor's rights hereunder, Associate, for value, voluntarily waive such defenses as Associate might otherwise have under the law of the jurisdiction in which the matter is being litigated, arbitrated or otherwise relating to any claimed "prior breach" on the part of the Franchisee; it being specifically understood and agreed between the Parties that no action or lack of action on the part of the Franchisee will entitle or permit the Associate to use or disclose any such Confidential Information in any circumstances.
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, in any litigation, arbitration, or other proceeding concerning the enforcement of a franchisee's or franchisor's rights, an associate voluntarily waives defenses related to any claimed "prior breach" on the part of the franchisee. This waiver is made for value, meaning the associate receives some benefit in exchange for giving up these defenses.
This waiver means that the associate cannot argue that the franchisee's prior actions or failures excuse the associate's own breach of contract or other wrongdoing. The agreement specifies that no action or inaction by the franchisee entitles or permits the associate to use or disclose any confidential information in any circumstances.
This provision is designed to protect Southern Steer's confidential information and trade secrets by preventing associates from justifying their disclosure or misuse of such information based on alleged prior breaches by the franchisee. It strengthens the franchisor's ability to enforce non-disclosure and non-compete agreements against associates, ensuring the integrity of the Southern Steer system.
For a prospective franchisee, this clause highlights the importance of ensuring that all associates fully understand and agree to these waivers, as it limits their legal defenses in potential disputes. It also underscores the franchisor's commitment to protecting its confidential information and trade secrets, which is a common practice in franchising to maintain a competitive advantage and protect the brand's value.