What constitutes the 'Lease' for a Southern Steer franchise, according to the FDD?

According to Southern Steer's 2025 Franchise Disclosure Document, the Lease refers to the written lease agreement and any related documents that the franchisee signs for the location of their Southern Steer franchise. The FDD specifies that if the franchisee or related entity owns, leases, or controls the location, they must enter into a lease agreement with commercially reasonable terms, similar to what unrelated parties would agree to in an arm's length transaction. This lease is considered a Major Asset of the franchisee, indicating its importance in the overall franchise operation. However, this requirement does not apply if the franchisee owns the location outright and it is listed as an asset on their financial statements.

Southern Steer requires franchisees to execute a lease that complies with these requirements within 90 days of the franchise agreement's effective date. The initial term of the Franchise Agreement is 10 years but may be extended to coincide with the lease term for the Southern Steer Business. The franchisee's ability to renew the franchise agreement for a Successor Term depends on being in good standing, including not being in default of the lease for the Franchised Location.

The franchisor also retains certain rights regarding the lease. Southern Steer has the option to take an assignment of the franchisee's lease if the franchisee defaults under either the lease or the franchise agreement. If Southern Steer takes assignment of the lease, they can re-assign or sublet the lease to a new franchisee without the landlord's consent. Upon termination or expiration of either the lease or the franchise agreement, the landlord is expected to cooperate with Southern Steer to secure possession of the premises and allow Southern Steer to remove signs and make necessary modifications to protect their brand and system.