What are some of the exceptions to the Protected Area granted to a Southern Steer Franchisee?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
nchised Location described in Attachment A. The rights granted to Franchisee by this Agreement are limited to the Protected Area and are subject to the reservation of rights described in Section 1.2(a).
- 1.2. Reservation of Rights. Franchisee acknowledges that the license granted hereunder, including in Section 1.1 is non-exclusive and, notwithstanding anything contained in this Agreement to the contrary, the following rights are reserved to Franchisor and its Affiliates and their successors and assigns:
- (a) Except as provided for in Section 1.4, to use, and license the use of, the System or component(s) thereof, for the operation of Southern Steer Businesses inside or outside Franchisee's Protected Area, regardless of proximity to the Protected Area and the Franchised Location;
- (b) To offer and sell any products and services sold at Southern Steer Businesses under any other names and marks, including through alternative channels of distribution;
- (c) To offer and sell, and/or license or franchise others to offer and sell, products and services for Other Businesses and market Other Businesses to anyone, including prospective and existing Franchisees anywhere within or outside of Franchisee's Protected Area;
- (d) To acquire businesses that are the same as or similar to the Southern Steer Business and operate such businesses anywhere within or outside of Franchisee's Protected Area and to be acquired by any third party which operates businesses that are the same as or similar to the Southern Steer Business anywhere within or outside of Franchisee Protected Area;
- (e) To market, distribute and sell, on a wholesale or retail basis, food products, prepackaged food, ancillary products and other goods, by direct sale, wholesale, the Internet, mail order, food truck, food trailer, third-party delivery services, other alternative distribution channels or by any other marketing or distribution method that may use the System under the Marks or other trademarks within or outside of Franchisee's Protected Area;
- (f) To implement multi-area marketing programs and delivery service programs which may allow Franchisor or others to solicit or sell to customers anywhere and Franchisor has the right to issue mandatory policies to coordinate such multi-area marketing programs and delivery service programs; and
- (g) To operate Southern Steer Businesses from Non-Traditional Locations anywhere.
- 1.3. Undetermined Franchised Location. The Franchised Location is described in the Attachment A. If the Franchised Location has not yet been determined as of the Effective Date of this Agreement, then when the address of the Franchised Location is determined, the street address, city and state for the Franchised Location will be inserted in Attachment A to this Agreement and signed by both the Franchisor and the Franchisee.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, a franchisee's protected area is subject to several exceptions. Southern Steer retains the right to use and license the System for Southern Steer Businesses both inside and outside the franchisee's protected area, regardless of proximity. They can also offer and sell products and services sold at Southern Steer Businesses under different names and marks through alternative distribution channels.
Southern Steer also reserves the right to offer and sell other products and services, or franchise others to do so, including marketing other businesses to prospective franchisees, even within a franchisee's protected area. They can acquire and operate businesses similar to Southern Steer, or be acquired by a third party operating similar businesses, without regard to the protected area. Additionally, Southern Steer can market, distribute, and sell food products and ancillary goods through various channels like wholesale, internet, mail order, food trucks, third-party delivery services, or any other method, within or outside the protected area.
Southern Steer is also allowed to implement multi-area marketing and delivery service programs that may solicit or sell to customers anywhere. Furthermore, Southern Steer can operate Southern Steer Businesses from non-traditional locations, irrespective of the protected area. It is important to note that if a franchisee fails to meet minimum gross revenues, Southern Steer may decrease or modify the franchisee's protected area or even operate or license others to operate Southern Steer Businesses within that area.
These exceptions mean that a Southern Steer franchisee's protected area is not absolute, and Southern Steer retains significant rights to operate and expand its brand through various channels, even within the franchisee's territory. This could potentially impact a franchisee's sales and market share. A prospective franchisee should carefully consider these exceptions and their potential impact on their business before investing in a Southern Steer franchise.