What are the conditions under which the Southern Steer franchisee maintains their Protected Area rights?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
the Franchise Agreement if Franchisee fails to provide Site Information for the Franchised Location and fails to lease a site for the Franchised Location, approved by Franchisor, within 90 days after the Effective Date of this Agreement.
- 1.4. Protected Area. Except as provided to the contrary in this Section, the Franchisee will receive the nonexclusive "Protected Area" defined in the Attachment A attached to this Agreement. Subject to the reservation of rights set out in Sections 1.2 (b)-(g) and Section 1.6 and so long as the Franchisee is not in default of this Agreement or any other agreement with Franchisor or any of Franchisor's Affiliates past applicable cure periods, the Franchisor and its Affiliates will not have the right to own, operate, franchise or license others to own or operate a Southern Steer Business physically located within the Franchisee's Protected Area, with the exception of Non-Traditional Locations.
- 1.5. Relocation.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, a franchisee's Protected Area is subject to specific conditions. The franchisee receives a nonexclusive Protected Area as defined in Attachment A of the Franchise Agreement. Southern Steer will not operate or franchise a Southern Steer Business physically located within the franchisee's Protected Area, with the exception of Non-Traditional Locations. This protection is contingent upon the franchisee remaining in compliance with the Franchise Agreement and any other agreements with Southern Steer or its affiliates, ensuring all obligations are met and no defaults occur beyond applicable cure periods.
However, Southern Steer retains significant rights that can impact the Protected Area. These include the right to use and license the Southern Steer system for businesses inside or outside the franchisee's Protected Area, the right to sell products and services under other names through alternative channels, and the right to market other businesses to anyone, including existing franchisees, within or outside the Protected Area. Southern Steer can also acquire and operate similar businesses or be acquired by a third party operating similar businesses, regardless of location. These reserved rights allow Southern Steer to compete with its own franchisees through different channels and brands.
Furthermore, if a Southern Steer franchisee fails to meet the Minimum Gross Revenues for any Year, Southern Steer has the right to take corrective actions. These actions include requiring the franchisee to attend additional training, increasing the Local Advertising Requirement, decreasing or modifying the franchisee's Protected Area, operating or licensing others to operate Southern Steer Businesses in the Protected Area, terminating the Franchise Agreement, or exercising other available remedies. This demonstrates that the Protected Area is not guaranteed and can be altered or revoked based on the franchisee's performance and compliance with the agreement.