What agreements may the Southern Steer Franchisor require the Operating Principal and other Owners to execute?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) The Operating Principal and each other Owner shall, at the request of the Franchisor, execute a separate Non-Competition and Non-Disclosure Agreement and the Personal Guaranty of each Franchise Agreement.
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, the franchisor may require the Operating Principal and each other Owner to execute a separate Non-Competition and Non-Disclosure Agreement and the Personal Guaranty of each Franchise Agreement. This requirement ensures that all individuals with significant involvement in the Southern Steer franchise are legally bound to protect the brand's interests and uphold the obligations outlined in the franchise agreement.
The Non-Competition and Non-Disclosure Agreement is a standard legal document in franchising, designed to prevent franchisees and their owners from engaging in activities that could harm the franchise system. This includes preventing them from opening a competing business during the franchise term and for a specified period afterward, as well as protecting the franchisor's confidential information and trade secrets. The Personal Guaranty means that the owners are personally liable for the financial obligations of the franchise, providing an additional layer of security for Southern Steer.
For a prospective Southern Steer franchisee, this means that not only will the business entity they establish be responsible for adhering to the Franchise Agreement, but they, as the Operating Principal or an Owner, will also be individually bound by these additional agreements. This is a common practice in franchising, as it ensures that the franchisor has recourse to the personal assets of the owners if the franchise fails to meet its financial obligations or violates the terms of the agreement. Franchisees should carefully review these agreements with legal counsel to fully understand their obligations and potential liabilities.