Are injunctive actions commenced by either party against Southern Steer subject to mediation or arbitration?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
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(d) The Associate also agrees that money damages alone cannot adequately compensate the Franchisee or the Franchisor if there is a breach of this Agreement by Associate, and that injunctive relief against the Associate is essential for the protection of the Franchisor and the Franchisee. Associate agrees therefore that, if the Franchisee or the Franchisor alleges that Associate has breached this Agreement, then the Franchisee and Franchisor will have the right to petition a court of competent jurisdiction for injunctive relief against the Associate, in addition to all other remedies that may be available. The Franchisee and/or Franchisor will not be required to post a bond or other security for any injunctive proceeding. If ex parte injunctive relief is granted against the Associate, then the Associate will have the right to petition the court for a hearing on the merits at the earliest time convenient to the court.
(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.
(f) The restrictions of this Section 3 will not be applicable to the ownership of shares of a class of securities listed on a stock exchange or traded on the over-the-counter market that represent 5% or less of the number of shares of that class of securities issued and outstanding.
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- Entire Agreement, Amendments; Waivers. This Agreement contains the entire agreement between Associate and the Franchisee relating to the matters set forth herein. No amendments or other variation to this Agreement will be effective unless in writing and signed by an authorized person on behalf of each Party.
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 FDD, injunctive relief related to a breach of the agreement by an associate is addressed specifically. Southern Steer and the franchisee have the right to seek injunctive relief against an associate in a court of competent jurisdiction if they allege a breach of the agreement. This remedy is in addition to any other remedies that may be available. Southern Steer and/or the franchisee are not required to post a bond or other security for any injunctive proceeding. If ex parte injunctive relief is granted against the associate, the associate has the right to petition the court for a hearing on the merits at the earliest time convenient to the court.
Additionally, the FDD states that if either party secures an injunction or order of specific performance, the non-securing party is responsible for covering costs, attorney's fees, and any damages permitted under the agreement. The non-securing party's only recourse in the event of such injunctive relief is to pursue the dissolution of the injunction, if warranted, through a duly held hearing. The document explicitly states that all claims for damages resulting from the wrongful issuance of an injunction are waived.
However, the FDD also includes a general clause regarding dispute resolution. It states that if a court determines that the requirement to mediate or arbitrate a dispute is unenforceable due to applicable law, restrictions on a party's rights or remedies, or any other reason, the arbitration clause will not be voided entirely. Instead, only the portions of the arbitration clause that conflict with applicable law will be considered invalid and severable, while the remainder of the clause will remain in effect. This suggests that while injunctive relief may be sought in court under certain circumstances, other disputes may be subject to mediation or arbitration, depending on the specifics of the claim and applicable law.