What additional costs might a Southern Steer franchisee incur to participate in a gift card program?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
We require You, if permitted by applicable law, to participate in a gift card or other customer loyalty program in accordance with the provisions either set forth in the Brand Manual or otherwise disclosed to You. In order to participate, You will be required to purchase additional equipment and pay any fees applicable to the use of that equipment. We have the right to determine how the amount of the gift cards or loyalty cards will be divided or otherwise accounted for, and We reserve the right to retain the amount of any unredeemed gift cards.
Source: Item 16 — ITEM. 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD pages 42–43)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, franchisees are required to participate in gift card programs as directed by Southern Steer. To facilitate this, franchisees may need to purchase additional equipment and cover any associated fees for using that equipment. This implies that franchisees will bear the costs of implementing and maintaining the gift card program within their Southern Steer business.
Southern Steer maintains control over the gift card program, including how the value of gift cards is accounted for, and retains the right to any unredeemed gift card amounts. This could impact a franchisee's potential revenue, as Southern Steer benefits from unredeemed balances.
In addition to equipment costs and fees, franchisees are obligated to purchase gift cards from Southern Steer's designated suppliers. This requirement ensures consistency across the brand but may limit a franchisee's ability to negotiate better rates or terms with alternative suppliers. The FDD also states that franchisees must purchase the POS system, which includes hardware and software, from designated suppliers, further emphasizing the control Southern Steer exerts over operational systems and associated costs.