Can the Southern Steer Brand Fund borrow money to cover deficits?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
The Brand Fund will be administered by Us. We may be reimbursed from the Brand Fund for reasonable administrative costs, salaries, and overhead expenses related to the administration and operation of the Brand Fund and its programs, including conducting market research, preparing material, social media, and other programs as well as administration, collecting and accounting for Brand Fund contributions.
As of January 31. 2025, We have not collected any Brand Fund Contributions. In any fiscal year, an amount greater or less than the aggregate contributions of all Southern Steer Business to the Brand Fund may be spent in that year.
The Brand Fund may borrow from Us or other lenders to cover deficits or invest any surplus for future use on any terms that We determine. We may reimburse ourselves or other lenders for such loans from the Brand Fund. Any amounts that remain in the Brand Fund at the end of each year accrue and We may apply them toward next year's expenses. We also reserve the right to borrow excess funds from the Brand Fund periodically in Our discretion to support other efforts to develop the System. We do not guarantee that advertising expenditures from the Brand Fund benefit You or any other Franchisee directly or on a pro rata basis. We do not undertake any obligation to ensure that Brand Fund expenditures in or affecting any geographic area are proportionate or equivalent to the contributions of Franchisees operating in that geographic area or that any Franchisee will benefit directly or in proportion to its contribution to the Brand Fund from the development of advertising and marketing materials or the placement of advertising.
Source: Item 11 — ITEM. 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 26–35)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, the Brand Fund can borrow money to cover deficits. Specifically, the Brand Fund may borrow from Southern Steer itself or other lenders to cover deficits. These loans can be made on terms that Southern Steer determines. Southern Steer may then reimburse themselves or other lenders for these loans from the Brand Fund.
Any amounts that remain in the Brand Fund at the end of each year will accrue, and Southern Steer may apply them toward the next year's expenses. Southern Steer also reserves the right to borrow excess funds from the Brand Fund periodically to support other efforts to develop the Southern Steer system.
As of January 31, 2025, Southern Steer had not collected any Brand Fund Contributions. It is important to note that Southern Steer does not guarantee that advertising expenditures from the Brand Fund will directly benefit any franchisee or be proportionate to their contributions.