Who is the Southern Steer franchise agreement binding upon?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
ved a copy of the complete disclosure document required by the Trade Regulation Rule of the Federal Trade Commission concerning the franchise at least 14 calendar days prior to the date on which this Agreement was executed. Franchisee have received a fully completed copy of this Agreement at least seven calendar days prior to signing it. The Franchisee acknowledges that he/she/it signed and dated the Receipt Page attached to the franchise disclosure document.
- 24.5. No Violation of any Other Agreement or Commitment. The execution and performance of this Agreement by You does not violate or constitute a breach of the terms of any other agreement or commitment to which You are a party.
- 24.6. Compliance. Franchisee, Franchisee's Operating Principal, and if Franchisee is a partnership, limited liability company, corporation or other entity, each of Franchisee partners, members, managers, shareholders, Guarantor(s) and Owners, as the case may be, represent that Franchisee and each of them is capable of complying and will comply with this Agreement.
- 24.7. Consultation with Advisers; Independent Investigation, Acknowledge of Franchisee. Franchisor has advised Franchisee to consult with advisers of Franchisee's own choosing. Franchisee have been given ample time to do so before signing this Agreement.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, the franchise agreement is binding upon several parties, including the franchisee, the franchisee's operating principal, and potentially other related individuals or entities. Specifically, if the franchisee is a partnership, limited liability company, corporation, or other entity, the agreement extends to each of the franchisee's partners, members, managers, shareholders, guarantors, and owners. This ensures that all individuals with a significant stake in the franchise operation are held accountable for compliance with the terms of the agreement.
Furthermore, if any person or entity ceases to be one of the franchisee's owners or if any individual or entity becomes an owner of the franchisee, the franchisee is obligated to notify Southern Steer in writing. Within five business days, the franchisee must ensure that the new owner executes all documents required by Southern Steer at that time. This provision maintains control over who can become involved in the ownership of the franchise and ensures that all owners are bound by the franchise agreement.
Southern Steer also requires that the franchisee's organizational documents and any documents representing ownership in the franchisee stipulate that no ownership interest in the franchisee may be assigned or transferred to any person or entity unless it strictly complies with the terms, conditions, and restrictions outlined in the franchise agreement. Additionally, each of the franchisee's owners must execute a Personal Guaranty and a Non-competition and Non-Disclosure Agreement, further solidifying their commitment to the franchise and protecting Southern Steer's interests. This comprehensive approach ensures that the obligations and responsibilities under the franchise agreement are clearly defined and enforceable across all relevant parties.