Following a wrongful termination attempt of the Southern Steer Multi-Unit Development Agreement, are the parties still obligated to perform the agreement's terms?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
The Multi-Unit Developer's obligations under this Agreement will in no way be affected or changed because of non-acceptance by the Franchisor of the Multi-Unit Developer's Offer and, as a consequence, the terms and conditions of this Agreement will remain in full force and effect.
The decision by the Franchisor not to exercise the option to purchase granted to it pursuant to this Section 9 will not, in any way, be deemed to grant the Multi-Unit Developer the right to terminate this Agreement and will not affect the Term of this Agreement.
Moreover, if the Franchisor does not exercise the option to purchase granted to it pursuant to this Section 9.6 and if the Multi-Unit Developer sells or otherwise disposes of its Major Assets to a third party, 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.
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)
Based on the 2025 Southern Steer Franchise Disclosure Document, the Multi-Unit Developer's obligations under the agreement remain in full force and effect, irrespective of whether Southern Steer accepts the Multi-Unit Developer's offer. The terms and conditions of the agreement are not affected or changed due to non-acceptance by Southern Steer.
Furthermore, Southern Steer's decision not to exercise an option to purchase does not grant the Multi-Unit Developer the right to terminate the agreement, nor does it affect the agreement's term. If Southern Steer does not exercise its option to purchase and the Multi-Unit Developer sells or disposes of its major assets to a third party, both the Multi-Unit Developer and the purchaser must comply with the terms and conditions outlined in Section 7 of the agreement.
Moreover, any transfer of the Multi-Unit Developer's Southern Steer businesses that does not include a transfer of the agreement to the transferee will be considered a wrongful termination of the agreement by the Multi-Unit Developer. This highlights the importance of adhering to the terms of the Multi-Unit Development Agreement, even in situations where there are disagreements or potential changes in ownership.