What constitutes abandonment of the Southern Steer business development activities that could lead to immediate termination?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) the Multi-Unit Developer fails to comply with the Development Schedule set forth in Section 5 and Attachment A (does not have the required number of Southern Steer Businesses open and operating in the Development Territory as specified in the Development Schedule);
(b) the Multi-Unit Developer ceases to actively engage in development activities in the Development Territory in order to meet the Development Schedule or otherwise abandons the business authorized hereunder for a period of three consecutive months, or any shorter period that indicates an intent by the Franchisee to discontinue development of Southern Steer Businesses in the Development Territory;
Source: Item 5 — and 7 of the FDD, Section 3.1 of the Franchise Agreement and Section 4.1 of the Multi-Unit Development Agreement are hereby amended to state that payment of the initial franchise fee and development fee will be deferred until We have satisfied Our pre-opening obligations, and You have commenced business operations. (FDD pages 168–290)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, a Multi-Unit Developer can face immediate termination if they cease active engagement in development activities within their designated territory. This includes failing to meet the development schedule or abandoning the business for three consecutive months. The agreement specifies that even a shorter period can trigger termination if it indicates an intent to discontinue development of Southern Steer businesses in the Development Territory.
This provision is crucial for Southern Steer as it ensures that Multi-Unit Developers are actively working to expand the brand's presence. The franchisor needs developers to meet their obligations to grow the brand. By including this clause, Southern Steer aims to prevent developers from securing territories without actively pursuing the establishment of new locations.
For a prospective franchisee, this means that securing a multi-unit development agreement requires a serious commitment to expansion. It's not enough to simply acquire the rights to a territory; the franchisee must demonstrate continuous effort to open new Southern Steer locations according to the agreed-upon schedule. Failure to do so could result in the loss of development rights and the termination of the agreement.