What is the obligation of each party regarding providing copies of documents during arbitration between Southern Steer and the Multi-Unit Developer?
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).
- 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.
Where such discretion has been exercised and is supported by the business judgment of Franchisor or Multi-Unit Developer and Controlled Entity (if any), a mediator, arbitrator or judge shall not substitute his or her judgment for the judgment so exercised by Franchisor or Multi-Unit Developer and Controlled Entity (if any).
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 Franchise Disclosure Document, the excerpts provided do not specify the exact obligations of Southern Steer and the Multi-Unit Developer regarding the exchange of documents during an arbitration process. The document does define what constitutes a 'Dispute' and states that the arbitrator determines the validity and scope of the arbitration agreement unless the arbitrator invalidates the Arbitration provision in its entirety.
However, the FDD does outline general acknowledgments and expectations for both parties in the event of a dispute. It emphasizes that certain provisions of the agreement reflect the rights of both Southern Steer and the Multi-Unit Developer to make business decisions based on their assessment of the franchised system's long-term interests. The document also states that a mediator, arbitrator, or judge should not substitute their judgment for the business judgment exercised by either party.
To fully understand the obligations of each party regarding document exchange during arbitration, a prospective franchisee should ask Southern Steer for specific details about the arbitration process, including the rules and procedures for discovery and document production. This information is crucial for assessing the potential costs and burdens associated with resolving disputes through arbitration.