What are the consequences if a Southern Steer Multi-Unit Developer fails to pay uncontested obligations to the franchisor, its affiliates, or other creditors?

According to Southern Steer's 2025 Franchise Disclosure Document, if a Multi-Unit Developer, its Owners, Operating Principal, Guarantors or any Controlled Entity fails to timely pay any of its uncontested obligations or liabilities (where there is no reasonable commercial dispute) due and owing to Southern Steer, its Affiliate, suppliers, banks, purveyors, other creditors or to any federal, state or municipal government, it constitutes grounds for termination of the Multi-Unit Development Agreement.

Termination of the Multi-Unit Development Agreement means the Multi-Unit Developer will have no rights to open additional Southern Steer Businesses within the Development Territory. However, the termination will not affect the individual Franchise Agreements for the Southern Steer Businesses opened and operating in the Development Territory pursuant to this Agreement which were signed by the parties prior to termination of this Agreement. The Multi-Unit Developer and Controlled Entity (if any) will continue to pay all required Fees and to operate its Southern Steer Business opened in the Development Territory pursuant to the terms of the applicable Franchise Agreements signed by the Multi-Unit Developer or Controlled Entity (if any) prior to the date of the termination of this Agreement, and will in all other respects continue to comply with such Franchise Agreements.

Upon termination, all rights to open and operate additional Southern Steer Businesses in the Development Territory and all other rights granted to the Multi-Unit Developer under this Agreement will immediately revert to Southern Steer. Southern Steer will have the absolute right to develop Southern Steer Businesses in the Development Territory or to contract with other persons for the development of additional Southern Steer Businesses in the Development Territory. The Multi-Unit Developer will have no right to obtain a refund of any monies it paid to Southern Steer pursuant to this Agreement or the Franchise Agreements. The indemnities and covenants contained in this Agreement will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.

This is a significant risk for a prospective franchisee. Failure to manage finances and pay obligations on time, even if the amounts are relatively small, can lead to the loss of development rights for the entire territory, severely limiting the potential return on investment. Prospective franchisees should carefully consider their financial management capabilities and ensure they have sufficient capital to meet all obligations.