If a provision of the Southern Steer Multi-Unit Development Agreement is deemed invalid, illegal, or unenforceable, how does this affect the rest of the agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Only those portions of the arbitration clause with respect to such claim or claims as are necessary to comply with applicable law will be invalid and considered severable, but the remainder will be enforced.
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, if any portion of the arbitration clause is deemed invalid or unenforceable, only the necessary parts to comply with the law will be affected. The remainder of the arbitration clause will still be enforced.
This means that Southern Steer aims to maintain as much of the original agreement as possible, even if certain parts are challenged. This approach is fairly standard in franchising, as it seeks to uphold the overall intent and obligations outlined in the contract while adhering to legal requirements.
For a prospective franchisee, this clause provides some assurance that the entire agreement won't be nullified due to a problem with one specific provision. However, it's important to understand which aspects of the arbitration clause could be deemed invalid under applicable laws and how that might impact dispute resolution.