Does the Designated Manager for a Southern Steer franchise need to have an ownership equity interest in the Franchisee?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
ng all operational decisions with respect to Franchisee's Southern Steer Business. The Operating Principal will be required to execute the personal guaranty attached to this Agreement as Attachment C ("Personal Guaranty") and the Non-Competition and Non-Disclosure Agreement attached to this Agreement as Attachments J-1 and J-2.
- 4.2. Designated Manager. Prior attending the Initial Training Program, the Franchisee will designate an individual as the "Designated Manager." The Designated Manager will, during the entire period he or she serves as the Designated Manager, devote his or her full time and best efforts to the supervision, conduct and day to day operations of the Franc
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 Designated Manager is not required to have an ownership equity interest in the franchisee. The Designated Manager must be approved by Southern Steer and devote their full time and best efforts to the daily operations of the Southern Steer business. They are also required to sign a Non-Competition and Non-Disclosure Agreement.
This differs from the Operating Principal, who, if not the franchisee themselves, must own or have the right to own and control at least 51% of the ownership equity in the franchisee. The Operating Principal also needs to have the authority to make operational decisions for the Southern Steer business and is required to execute a personal guaranty and a Non-Competition and Non-Disclosure Agreement.
In summary, while the Operating Principal needs to have a significant ownership stake, the Designated Manager can be an employee or other individual without any ownership in the Southern Steer franchise. This provides flexibility for franchisees who may want to hire a manager to oversee daily operations without giving up equity.