Under the Southern Steer Multi-Unit Development Agreement, what is the effect of severability on the remaining provisions if one is deemed invalid?
Southern_Steer Franchise · 2025 FDDAnswer 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.
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 Southern Steer's 2025 Franchise Disclosure Document, if any portion of the arbitration clause is deemed invalid, only the necessary parts to comply with the law will be considered severable. The remainder of the arbitration clause will still be enforced. This means that even if a specific part of the arbitration process is found to be unenforceable, the overall agreement to arbitrate disputes remains in effect to the maximum extent possible.
This severability clause ensures that the core intention of the arbitration agreement is upheld, preventing parties from completely avoiding arbitration due to a minor legal technicality. It provides a degree of stability and predictability in the dispute resolution process.
For a prospective Southern Steer multi-unit developer, this means that disputes are likely to be resolved through arbitration, as intended by the agreement, even if some specific aspects of the arbitration clause are challenged. This could save time and money compared to traditional litigation, but it also means giving up some rights to a court trial. Franchisees should consult with legal counsel to fully understand the implications of the arbitration clause and its severability provision.