Are disputes regarding the use of Southern Steer's trademarks subject to mediation or arbitration?
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)
Based on the 2025 Southern Steer Franchise Disclosure Document, disputes, controversies, or claims between Southern Steer and a Multi-Unit Developer, including those related to agreements, relationships, or the development of Southern Steer Businesses, are subject to mediation and arbitration. This extends to disputes involving the validity and scope of the agreement, including the arbitration obligation itself.
The FDD specifies that an arbitrator, not a court, will determine the validity and scope of the arbitration provision. However, if the arbitrator invalidates the arbitration provision entirely, either party has the right to appeal such invalidation to a court of competent jurisdiction. This ensures that while arbitration is the primary method for resolving disputes, there is a mechanism for judicial review under specific circumstances.
The document also emphasizes that mediators, arbitrators, and judges should respect the business judgment exercised by Southern Steer or the Multi-Unit Developer. They are instructed not to substitute their judgment for the business judgment of either party when such discretion has been exercised and is supported by a reasonable assessment of the long-term interests of the franchised system. This clause aims to protect the strategic decisions made by Southern Steer and its developers in managing the franchise network.