What dispute resolution mechanisms have Southern Steer and the Multi-Unit Developer agreed to?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- Definition of Dispute.
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, disputes between Southern Steer and a Multi-Unit Developer are addressed through specific mechanisms. A "Dispute" is defined as any controversy or claim between Southern Steer, its affiliates, shareholders, and personnel, and the Multi-Unit Developer, their controlled entities, operating principals, owners, guarantors, designated managers, affiliates, officers, directors, agents, and employees. These disputes arise from the Multi-Unit Development Agreement, any related agreements, the relationship between the parties, the development of Southern Steer businesses, or the scope and validity of the agreements, including the arbitration obligation.
The FDD states that the arbitrator, not a court, will determine the validity and scope of the arbitration provision, unless the arbitrator invalidates the entire provision, in which case either party can appeal to a court. The parties acknowledge that certain provisions of the agreement allow Southern Steer and the Multi-Unit Developer to exercise business judgment. Mediators, arbitrators, and judges are instructed not to substitute their judgment for the business judgment exercised by either party, provided it is based on an assessment of the long-term interests of the franchised system.
This indicates that Southern Steer aims to resolve disputes through mediation and arbitration, emphasizing the importance of business judgment in decision-making. However, the specific details of the mediation or arbitration process, such as the selection of mediators or arbitrators, the rules governing the proceedings, and the allocation of costs, are not detailed in this excerpt. A prospective franchisee should inquire about these specific procedures to fully understand the dispute resolution process.