What is the definition of 'Interim Period' referenced in the Southern Steer in-term covenant not to compete?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Interim Period.
If the Franchisee does not sign a Successor Franchise Agreement prior to the expiration of the Initial Term of this Agreement and the Franchisee continues to accept the benefits of this Agreement after the expiration of this Agreement, then at the Franchisor's option, this Agreement may be treated either as (a) expired as of the date of expiration with the Franchisee then operating without a
license to do so and in violation of Franchisor's rights; or (b) continued on a month-to-month basis ("Interim Period") until one party provides the other with written notice of such party's intent to terminate the Interim Period, in which case the Interim Period will terminate 30 days after receipt of the notice to terminate the Interim Period and the provisions of Section 21 will apply.
In the latter case, all of the Franchisee's obligations will remain in full force and effect during the Interim Period as if this Agreement had not expired, and all obligations and restrictions imposed on the Franchisee upon expiration of this Agreement will be deemed to take effect upon termination of the Interim Period.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, the 'Interim Period' refers to a specific timeframe that can occur after the initial franchise term. If a franchisee does not sign a Successor Franchise Agreement before the initial term expires, but continues to operate and benefit from the agreement, Southern Steer has the option to treat the agreement as either expired or continued on a month-to-month basis.
If Southern Steer chooses to continue the agreement on a month-to-month basis, this period is termed the "Interim Period". This period lasts until either party provides written notice of their intent to terminate, at which point the Interim Period ends 30 days after the notice is received. Upon termination of the Interim Period, the obligations and restrictions that apply upon the expiration of the agreement take effect.
During the Interim Period, all of the franchisee's obligations remain in full force, as if the original agreement had not expired. This means the franchisee must continue to meet all requirements and restrictions outlined in the franchise agreement. This definition is important because the in-term covenant not to compete applies not only during the Initial Term but also during any Interim Period, restricting the franchisee from engaging in competitive activities unless expressly authorized by Southern Steer in writing.