What objections do Multi-Unit Developers waive regarding jurisdiction and venue related to Southern Steer?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
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).
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 definition of what constitutes a 'Dispute' includes the validity and scope of the arbitration obligation. The FDD states that the Multi-Unit Developer and Franchisor acknowledge that this will be determined by an arbitrator and not a court.
However, if the arbitrator invalidates the Arbitration provision in its entirety, either party has the right to appeal such invalidation to a court of competent jurisdiction. This outlines a specific legal process agreed upon by both parties regarding dispute resolution.
In practical terms, this means a Multi-Unit Developer agrees to resolve disputes through arbitration initially, potentially waiving their right to a court trial unless the arbitration clause itself is invalidated. This can lead to a quicker and potentially less expensive resolution process, but it also limits the avenues for appeal compared to a traditional court setting. Prospective franchisees should understand the implications of agreeing to arbitration and the specific conditions under which they can still pursue legal action in court.