When does the deposit for a Southern Steer franchise become non-refundable?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
| by | This Deposit Agreement ("Agreement") is made as of ("Effective Date") and between Southern Steer Franchising International, LLC ("Franchisor"), and ("you", "your", "I" or "my") whose principal business address is |
|---|---|
| RECITAL | |
| I understand that my application for the grant of a franchise to operate a Southern Steer | |
| Business in the general area of, which was submitted on, has | |
| been approved. | |
| I acknowledge that I am using funds for the Initial Franchise Fee from my 401K, IRA other | |
| qualified retirement account roll-over or third-party lender ("Funds"). The Funds will be available | |
| on or before | |
| To continue the process of obtaining a license to operate a Southern Steer Business, I am | |
| paying a Deposit toward the Initial Franchise Fee in accordance with this Agreement. | |
| In consideration of the foregoing and the covenants and consideration below, Franchisor | |
| and I agree as follows: | |
| AGREEMENT | |
| 1. | Deposit. Upon execution of this Agreement, I will pay Franchisor a deposit in the amount |
| of $29,750 ("Deposit"). The full Deposit will be applied to the Initial Franchise Fee. Upon | |
| execution of the Franchise Agreement, my Deposit will be immediately non-refundable. | |
| The Deposit will be deemed earned by Franchisor for processing of my Franchise | |
| Agreement and for services performed following the effective date of my Franchise | |
| Agreement. Franchisor' |
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, the $29,750 deposit paid towards the initial franchise fee becomes immediately non-refundable upon the execution of the Franchise Agreement. This means that once the franchisee signs the Franchise Agreement, they will not be able to get the deposit back, regardless of whether they proceed with opening the Southern Steer business. The deposit is deemed earned by Southern Steer for processing the Franchise Agreement and for services performed following the effective date of the Franchise Agreement.
Southern Steer's obligations regarding the deposit are those of a debtor, not a trustee, and they are not required to keep the deposit in a separate account or pay interest on it. This is a standard practice in franchising, where initial fees and deposits are often used to cover the franchisor's initial expenses in setting up the franchise relationship.
It is important for a prospective Southern Steer franchisee to understand that the deposit is at risk once the Franchise Agreement is signed. Therefore, the franchisee should carefully review the Franchise Agreement and conduct thorough due diligence before signing to ensure they are fully committed to the franchise opportunity. If a franchisee decides not to move forward with the franchise after signing the Franchise Agreement, they will forfeit the $29,750 deposit.