In Michigan, can Southern Steer require arbitration or litigation to be conducted outside of the state?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
This section does not require a renewal provision.
- (f) A provision requiring that arbitration or litigation be conducted outside this state.
This shall not preclude you from entering into an agreement, at the time of arbitration, to conduct arbitration at a location outside this state.
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, a provision requiring arbitration or litigation to be conducted outside of Michigan is generally not allowed. However, a Southern Steer franchisee in Michigan is not prevented from entering into an agreement, at the time of arbitration, to conduct the arbitration at a location outside of the state.
This means that while the initial franchise agreement cannot mandate out-of-state arbitration or litigation, a franchisee can later agree to it if a dispute arises and both parties consent to an out-of-state venue for the arbitration proceedings. This provides some flexibility while protecting the franchisee's rights under Michigan law.
Prospective Southern Steer franchisees in Michigan should be aware of this protection, ensuring that the initial franchise agreement does not contain any clauses that force them to arbitrate or litigate outside of Michigan. They should also understand their right to agree to such a venue at the time of arbitration, allowing for potential negotiation based on the specific circumstances of any dispute.