Is the Designated Manager for a Southern Steer franchise required to have an ownership equity interest in the Franchisee?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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 Franchisee's Southern Steer Business. The Designated Manager must be approved by Franchisor; however, the Designated Manager does not have to have an ownership equity interest in Franchisee. The Designated Manager will be required to execute the Non-Competition and Non-Disclosure Agreement attached to this Agreement as Attachments J-1 and J-2.
- 4.3. Replacement Designated Manager. If during the Term of this Agreement or any Interim Period, the Designated Manager is not able or is not qualified to continue to serve in the capacity of Designated Manager, then the Franchisee will promptly notify the Franchisor in writing and will designate a duly qualified replacement Designated Manager within 30 days after the former Designated Manager ceases to serve in that capacity. The replacement Designated Manager will be required to satisfactorily complete the Initial Training Program, at Franchisee's sole cost and expense, and execute the Non-Competition and Non-Disclosure Agreement within the period required by Franchisor.
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 ownership equity in the franchise. The franchisee must designate an individual as the Designated Manager before attending the Initial Training Program. This manager will then devote their full time and effort to supervising and operating the Southern Steer business on a daily basis.
While the Designated Manager does not need to have ownership, they must be approved by Southern Steer. This suggests that Southern Steer has specific criteria or qualifications for the Designated Manager role. The Designated Manager is also required to sign a Non-Competition and Non-Disclosure Agreement, indicating they will be exposed to confidential business information and are restricted from competing with Southern Steer, both during and after their tenure.
If a Designated Manager is no longer able to fulfill their duties, the franchisee must notify Southern Steer and find a qualified replacement within 30 days. The replacement manager will need to complete the Initial Training Program at the franchisee's expense and also sign the Non-Competition and Non-Disclosure Agreement. This ensures that all managers are properly trained and legally bound to protect Southern Steer's interests, regardless of whether they have an ownership stake.