What activities are considered 'Competitive Activity' in relation to a Southern Steer franchise?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) "Competitive Activity" means (i) offering products and services that are the same as, similar to or competitive with a Southern Steer Business; (ii) operating a business or selling goods or providing services that features butcher, specialty grocer, marinated meats, or food preparation classes or that employs or incorporates one or more distinctive elements of the System; (iii) providing services of the type provided by Franchisor and/or its Affiliates where those services are provided in relation to businesses of the type described in Sections (i)-(ii); (iv) Ownership, whether directly or indirectly, and whether beneficially or of record of any capital stock, partnership interest, membership interest or any other interest in a business or entity that engages in the activities described in Sections (i) - (ii); (v) participation, either directly or indirectly, in the management or operation of a business as a partner, investor, shareholder, owner, director, officer, employee, principal, agent, advisor, manager, franchisee, licensee, contractor or consultant or in any other capacity of any entity, business or person that engages in the activities described in Sections (i) - (ii); (vi) Franchise, license, conduct or be connected with or assist any person, entity or business to franchise, license, conduct or be connected with the activities described in Sections (i) - (ii); and (vii) divert or attempt to divert, directly or indirectly, any business related to, or any customer or account of, Franchisee's Southern Steer Business, Franchisor, Affiliates, any Other Business operated by Franchisor its franchisees, licensees or Affiliates, or any other business then being offered or operated by Franchisor or its Affiliate(s) in the Protected Area.
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 'Competitive Activity' encompasses a wide range of actions that could potentially undermine the Southern Steer business model. This includes directly offering similar products or services, operating a business with butcher shop or specialty grocer elements, or providing food preparation classes that mirror Southern Steer's offerings.
Furthermore, 'Competitive Activity' extends to indirect involvement, such as owning stock in a competing business or participating in its management. It also includes activities like franchising or assisting another entity to engage in similar competitive actions. Most importantly, franchisees are prohibited from diverting or attempting to divert business away from their Southern Steer franchise, other Southern Steer businesses, or the franchisor's affiliates.
These restrictions are designed to protect Southern Steer's market position, confidential information, and established goodwill. Prospective franchisees should carefully consider these limitations, as they significantly restrict their ability to engage in related business ventures, even passively, during the term of their franchise agreement. The definition of 'Competitive Activity' is broad, so franchisees need to be aware of all potential conflicts of interest.