Can the Brand Fund Contribution for a Southern Steer franchise be adjusted, and if so, under what conditions?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Brand Fund Contribution. Beginning the first Week of Franchisee's Required Opening Date, Franchisee will pay Franchisor a continuing weekly Brand Fund Contribution equal to 1% of Weekly Gross Revenues generated by the Franchisee's Southern Steer Business during the preceding Week ("Brand Fund Contribution"). The Brand Fund Contribution is Franchisor's exclusive property and will be used by Franchisor in accordance with Section 13. Franchisor is not required to separately account to Franchisee for the contributions or expenditures of the Brand Fund Contribution. Franchisor may increase, reduce or suspend the Brand Fund Contribution upon prior written notice.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, the Brand Fund Contribution, which is initially set at 1% of weekly gross revenues, is subject to adjustment by the franchisor. Southern Steer retains the right to increase, reduce, or even suspend the Brand Fund Contribution.
This flexibility in adjusting the Brand Fund Contribution provides Southern Steer with the ability to respond to changing market conditions or strategic needs. For a prospective franchisee, this means that the marketing costs, initially calculated as 1% of weekly gross revenues, could fluctuate over time. While a reduction or suspension of the fee would benefit the franchisee's bottom line, an increase would raise operating costs.
Southern Steer is obligated to provide prior written notice before making any changes to the Brand Fund Contribution. This notice period allows franchisees to prepare for any potential financial adjustments. It is important for prospective franchisees to inquire about the conditions under which these adjustments might occur and to understand the potential impact on their business's profitability.
The Brand Fund is used to maximize general public recognition of the Southern Steer system. Southern Steer has the right to determine how the Brand Fund contributions are spent, including on media advertising, salaries and administrative costs, website development, market research, and brand conferences. The Brand Fund may be terminated at any time by Southern Steer, in its sole discretion.