factual

How many arbitrators are involved in the arbitration proceeding between Southern Steer and the Multi-Unit Developer?

Southern_Steer Franchise · 2025 FDD

Answer 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.

  • 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.

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, the document does not specify the number of arbitrators involved in an arbitration proceeding between Southern Steer and a Multi-Unit Developer. The FDD does define what constitutes a 'Dispute' and states that the arbitrator will determine the validity and scope of the arbitration obligation unless the arbitrator invalidates the Arbitration provision in its entirety. In that case, either party has the right to appeal such invalidation to a court of competent jurisdiction.

Additionally, the FDD states that any mediator, arbitrator, and judge are advised that certain provisions of the agreement reflect the rights of Southern Steer and the Multi-Unit Developer to take actions based on their business judgment. The document specifies that a mediator, arbitrator, or judge should not substitute their judgment for the business judgment exercised by Southern Steer or the Multi-Unit Developer.

A prospective franchisee should seek clarification from Southern Steer regarding the specific procedures and rules governing arbitration, including the number of arbitrators, the method of selection, and the allocation of costs. Understanding these details is crucial for assessing the potential risks and expenses associated with dispute resolution.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.