What capital requirements must a Southern Steer franchisee maintain?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
ts exists only to the extent necessary to protect Franchisor's interest in the System for the benefit of Franchisor, its Affiliates, other franchisees and licensees. Neither the retention nor the exercise of such right is for the purpose of establishing any control, or the duty to take control, of Franchisee's Southern Steer Business nor will they be construed to do so.
- (c) Working Capital. Franchisee will, at all times, maintain sufficient working capital to operate the Southern Steer Business and to fulfill its obligations under this Agreement, and will take steps to ensure availability of capital to fulfill the Franchisee's obligations to maintain, remodel and modernize the premises and operations of the Southern Steer Business as required by the provisions of this Agreement.
- (d) Independent Entity. In all dealings with third parties including, without limitation, employees, suppliers, vendors, manufacturers, distributors, other franchisees and customers, Franchisee will disclose in an appropriate manner acceptable to Franchisor that Franchisee are an independent entity licensed by Franchisor. Any time Franchisee or its Operating Principal, Designated Manager or employees use their titles (e.g., president) it must be made clear that such person holds that position with Franchisee's entity and not with Franchisor.
- (e) Management.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, franchisees must maintain sufficient working capital to operate their business and meet their obligations under the Franchise Agreement. This includes ensuring they have enough capital to maintain, remodel, and modernize the Southern Steer Business premises as required by the agreement.
This requirement means a prospective Southern Steer franchisee needs to carefully plan their finances to ensure they can cover ongoing operational costs, as well as any unexpected expenses. They should also factor in the potential costs of remodeling or modernizing their location to meet Southern Steer's standards. This could involve setting aside funds or securing access to credit to handle these future capital expenditures.
Furthermore, when a franchisee seeks to renew their franchise agreement, they must demonstrate the financial capability to remodel the franchised location to comply with Southern Steer's current image, decor, and specifications. This can be satisfied by providing evidence of a written loan commitment from a commercial lender or by proving they have the financial resources to cover the remodeling costs. This ensures that all Southern Steer locations maintain a consistent brand image and meet the franchisor's standards.
Overall, these capital requirements highlight the importance of financial planning and management for Southern Steer franchisees. Franchisees must not only have enough capital to start and run their business but also to maintain and upgrade their location to meet the franchisor's evolving standards. This ensures the long-term viability and consistency of the Southern Steer brand.