What constitutes a failure to comply with the Development Schedule for Southern Steer that would 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;
(c) the 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 the Franchisor, its Affiliate, suppliers, banks, purveyors, other creditors or to any federal, state or municipal government;
(d) the Multi-Unit Developer, its Owners, Operating Principal, Guarantors or any Controlled Entity is determined to be insolvent within the meaning of applicable state or federal law, any involuntary petition for bankruptcy is filed against the Multi-Unit Developer and the Multi-Unit Developer is unable, within a period of 60 days from such filing, to obtain the dismissal of the involuntary petition, or the Multi-Unit Developer files for bankruptcy or is adjudicated a bankrupt under applicable state or federal law;
(e) the Multi-Unit Developer, its Owners, Operating Principal, Guarantors or any Controlled Entity makes an assignment for the benefit of creditors or enters into any similar arrangement for the disposition of its assets for the benefit of creditors;
(f) the Multi-Unit Developer or any of its 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, and such conviction or plea could have a material adverse effect on the Multi-Unit Developer 's right or ability to operate the Southern Steer Businesses, perform its obligations under this Agreement or could have a material adverse effect on the Marks, goodwill, reputation or System;
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 Southern Steer's 2025 Franchise Disclosure Document, a multi-unit developer can face immediate termination for failing to comply with the Development Schedule. This occurs if the developer does not have the required number of Southern Steer businesses open and operating in the Development Territory as specified in the Development Schedule. The Development Schedule is outlined in Section 5 and Attachment A of the Multi-Unit Development Agreement.
Furthermore, the Multi-Unit Developer must open and operate a minimum of three Southern Steer Businesses in the Development Territory. The FDD emphasizes that only Southern Steer Businesses that are actually open and continuously operating are counted towards meeting the Development Schedule requirements. Time is of the essence with respect to compliance with the Development Schedule.
In addition to failing to meet the required number of open and operating businesses, a Multi-Unit Developer can also face immediate termination for ceasing to actively engage in development activities in the Development Territory in order to meet the Development Schedule or otherwise abandons the business authorized for a period of three consecutive months, or any shorter period that indicates an intent to discontinue development of Southern Steer Businesses in the Development Territory. This highlights the importance of continuous effort and progress in developing the franchise locations as per the agreed-upon schedule.