What constitutes a breach of the MUDA that could lead to termination of the Southern Steer franchise agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Addendum for state law modifications). |#### THE MUDA RELATIONSHIP
This table lists certain important provisions of the Multi Unit Development Agreement and related agreements. You should read these provisions in the agreements attached to this Disclosure Document.
| Provision | Section in MUDA | Summary | ||
|---|---|---|---|---|
| a. | Length of agreement term | 3 | Begin on the Effective Date and end on the last | |
| day of the calendar month that the final Southern | ||||
| Steer Business is required to be developed and | ||||
| opened under the Development Schedule | ||||
| b. | Renewal or extension of the | Not applicable | ||
| term | ||||
| c. | Requirements for You to | Not applicable | ||
| renew or extend | ||||
| d. | Termination by You | Not applicable | ||
| e. | Termination by franchisor | Not applicable | ||
| without cause | ||||
| f. | Termination by franchisor | 8.1 | If you breach the MUDA. | |
| with cause | ||||
| g. | "Cause" defined – curable defaults | 8.2 | We have the right (subject to state law) to terminate the MUDA upon 30-days' notice if You or Your Controlled Entity failed to comply with the standards and Brand Manual as described in any Franchise Agreement; You fail to obtain required approvals; or any other reason that constitutes good cause under applicable law. | |
| h. | "Cause" defined – non curable defaults | 8.1 | We have the right (subject to state law) to terminate the MUDA immediately upon receipt of notice if Multi-Unit Developer (You): fail to cure the default of your Development Schedule in the MUDA; cease to engage in development activities; fail to pay uncontested obligations or liabilities, are deemed insolvent; make an assignment for the benefit of creditors; or Your Owners, Operating Principal, Executive Management, Guarantors or Controlled Entity are convicted of, or plead guilty to or no contest to a charge of violating any law or materially violates any federal, state or municipal law, rule, code or regulation applicable to the operations of the Multi-Unit Developer's or Controlled Entity's Southern Steer Businesses, breaches any provision, term or condition of this Agreement or any Franchise Agreement or other agreement between Multi-Unit Developer or Controlled Entity and Franchisor or its Affiliates and fails to cure such default within the period | |
| Provision | Section in | Summary | ||
| MUDA | ||||
| ---- | --------------------------------------------- | -------------------- | -------------------------------------------------------------------------------------------------------------- | -- |
| prescribed; any check or EFT issued by the | ||||
| Multi-Unit Developer or Controlled Entity is | ||||
| dishonored; are involved in any act or conduct | ||||
| which | ||||
| materially | ||||
| impairs | ||||
| the | ||||
| goodwill | ||||
| associated with "Southern Steer Butcher," any | ||||
| other of the Marks or with the System that is not | ||||
| cured | ||||
| within | ||||
| 24 | ||||
| hours; | ||||
| engages | ||||
| in | ||||
| any | ||||
| unauthorized business or practice or sells any | ||||
| unauthorized product or service under the | ||||
| Franchisor's Marks, any Franchise Agreement | ||||
| between You and Franchisor is terminated; or | ||||
| Your Owners, Operating Principal, Executive | ||||
| Management, Guarantors or Controlled Entity | ||||
| breach the non-compete and confidentiality | ||||
| covenants in the Franchise Agreement; two or | ||||
| more | ||||
| defaults | ||||
| in | ||||
| a | ||||
| Development | ||||
| Period | ||||
| regardless of whether the defaults are cured; or | ||||
| assign the MUDA or rights therein without | ||||
| complying with Section 7.2. | ||||
| i. |
Source: Item 17 — ITEM. 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–50)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, there are several actions that can be considered a breach of the Multi-Unit Development Agreement (MUDA), leading to its termination. Southern Steer can terminate the MUDA if the franchisee fails to comply with the standards and Brand Manual as described in any Franchise Agreement, fails to obtain required approvals, or for any other reason that constitutes good cause under applicable law, provided a 30-day notice is given. These are considered curable defaults, meaning the franchisee has an opportunity to correct the issue.
However, Southern Steer can terminate the MUDA immediately upon notice for non-curable defaults. These include failing to meet the Development Schedule, ceasing development activities, failing to pay uncontested obligations, or becoming insolvent. Additionally, the MUDA can be terminated immediately if the franchisee's Owners, Operating Principal, Executive Management, Guarantors or Controlled Entity are convicted of violating any law, materially violates laws applicable to the Southern Steer Businesses, breaches any agreement with Southern Steer, has a dishonored check or EFT, engages in conduct that impairs the goodwill associated with Southern Steer, engages in unauthorized business practices, has a Franchise Agreement terminated, breaches non-compete and confidentiality covenants, has two or more defaults in a Development Period, or assigns the MUDA without complying with Section 7.2.
For a prospective Southern Steer multi-unit franchisee, it's crucial to understand these termination conditions. The distinction between curable and non-curable defaults is particularly important. Curable defaults allow time to rectify the issue, while non-curable defaults can lead to immediate termination. The franchisee should pay close attention to the Development Schedule and financial obligations to avoid potential breaches. Furthermore, ensuring that all parties associated with the franchise adhere to legal and ethical standards is vital to prevent immediate termination of the MUDA.
It is also important to note that Your rights under MUDA revert to Us and You must continue to operate the Southern Steer Business You opened before termination of the MUDA. Southern Steer also reserves the right to purchase Your opened Southern Steer Business from You.