In the event of wrongful termination of the Southern Steer Multi-Unit Development Agreement, does the agreement remain in effect?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
ty, then both the Multi-Unit Developer and the purchaser will be required to comply in all respects with the terms and conditions of Section 7 of this Agreement. Any Transfer of the Multi-Unit Developer's Southern Steer Businesses that does not include a Transfer of this Agreement to the transferee will constitute a wrongful termination of this Agreement by the Multi-Unit Developer.
- Transfer of Ownership Interest.
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, if a Multi-Unit Developer transfers their Southern Steer businesses without transferring the Multi-Unit Development Agreement, it constitutes a wrongful termination of the agreement. In this case, the terms and conditions of the agreement will remain in full force and effect.
This means that even if Southern Steer believes the Multi-Unit Developer has wrongfully terminated the agreement, the developer is still obligated to fulfill the requirements outlined in the agreement. This could include adhering to development schedules, maintaining brand standards, and meeting financial obligations.
For a prospective franchisee, this clause highlights the importance of understanding all the terms of the Multi-Unit Development Agreement and the potential consequences of actions that could be interpreted as a wrongful termination. It also emphasizes the need to seek legal counsel to fully understand their obligations and rights under the agreement.