If any specification, standard, or operating procedure prescribed by Southern Steer is invalid under applicable law, what happens?
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 under applicable law, only the necessary parts to comply with the law will be considered invalid and severable. 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 legally challenged. This approach is fairly common in franchising, as franchisors seek to ensure that disputes are resolved through arbitration to the greatest extent permitted by law. This clause ensures that the core intent of the arbitration agreement remains intact, providing a framework for resolving disputes efficiently while adhering to legal requirements.
For a prospective franchisee, this clause suggests that Southern Steer is committed to resolving disputes through arbitration but will comply with legal requirements if certain provisions are found to be unenforceable. Franchisees should be aware of this clause and understand that while arbitration is preferred, the franchisor will adhere to applicable laws, potentially leading to court involvement if the arbitration provision is invalidated entirely.