What constitutes 'good cause' for Southern Steer to terminate a franchise agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
(b) the Multi-Unit Developer fails, refuses or neglects to obtain the Franchisor's prior written approval or consent as required by this Agreement; or
(c) the Multi-Unit Developer commits any other act that constitutes good cause under applicable law or court decisions.
(g) the Multi-Unit Developer, its Owners, Operating Principal, Guarantors or any Controlled Entity 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, including a violation of any health department rules or regulations relating to any food safety standards that would in any way endanger the health or well-being of any of the customers or guests of the Multi-Unit Developer's or Controlled Entity's Southern Steer Businesses;
(h) the Multi-Unit Developer, its Owners, Operating Principal, Guarantors or a Controlled Entity 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 prescribed in such Franchise Agreement or other agreement;
(i) any check or EFT issued by the Multi-Unit Developer or Controlled Entity is dishonored because of insufficient funds (except where the check is dishonored because of bank error or an error in bookkeeping or accounting) or closed accounts more than three times during the Term of this Agreement;
(j) the Multi-Unit Developer, its Owners, Operating Principal, Guarantors or any Controlled Entity 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 and the Multi-Unit Developer, its Owners, Operating Principal, Guarantors or any Controlled Entity fails to correct the breach within 24 hours after receipt of written notice of the breach from the Franchisor;
(k) the Multi-Unit Developer or any Controlled Entity engages in any unauthorized business or practice or sells any unauthorized product or service under the Franchisor's Marks or under a name or mark which is confusingly similar to the Franchisor's Marks;
(l) any Franchise Agreement between the Multi-Unit Developer (or a Controlled Entity) and the Franchisor is terminated by either party for any reason;
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, 'good cause' for termination includes specific failures and violations by the Multi-Unit Developer. These include failing to maintain operating procedures, neglecting to obtain required prior written approval from Southern Steer, or committing any act that constitutes good cause under applicable law or court decisions.
For a Southern Steer franchisee, this means that maintaining compliance with the brand's operational standards and seeking necessary approvals is critical to avoid potential termination. The reference to 'good cause under applicable law or court decisions' introduces an element of legal interpretation, meaning that actions not explicitly listed in the franchise agreement could still lead to termination if they violate relevant laws or judicial precedents.
Additionally, Southern Steer can terminate the agreement if the Multi-Unit Developer, its Owners, Operating Principal, Guarantors or any Controlled Entity 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, including a violation of any health department rules or regulations relating to any food safety standards that would in any way endanger the health or well-being of any of the customers or guests of the Multi-Unit Developer's or Controlled Entity's Southern Steer Businesses. Other causes for termination include breaching any agreement with Southern Steer and failing to cure the breach, repeated instances of dishonored checks, engaging in conduct that impairs the goodwill associated with Southern Steer, engaging in unauthorized business practices, or termination of any other Franchise Agreement between the developer and Southern Steer.
Prospective franchisees should be aware of these broad conditions, as they provide Southern Steer with significant latitude to terminate the agreement based on various compliance and legal factors. It would be prudent for potential franchisees to seek legal counsel to fully understand their obligations and the potential ramifications of non-compliance.