Does the Southern Steer franchise agreement define 'Competitive Business' in the context of the covenant not to compete?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) "Competitive Business" means any business, other than another Southern Steer Business that (a) offers products and services that are the same as, similar to or competitive with a Southern Steer Business; (b)operate in competition with or similar to a Southern Steer Business; or (c) sells goods or provides services that features butcher, a specialty grocer, marinated meats, or food preparation classes or that employs or incorporates one or more distinctive elements of the System.
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, the term "Competitive Business" is specifically defined within the franchise agreement. This definition is crucial because it outlines the scope of activities that a franchisee, owner, or recipient is prohibited from engaging in during and after the term of the franchise agreement, as part of the covenant not to compete.
The definition provided in the Southern Steer franchise agreement states that a "Competitive Business" includes any business, other than another Southern Steer Business, that offers products and services that are the same as, similar to, or competitive with a Southern Steer Business. It also includes businesses that operate in competition with or similarly to a Southern Steer Business. Furthermore, any business that sells goods or provides services featuring a butcher, a specialty grocer, marinated meats, or food preparation classes, or that employs or incorporates one or more distinctive elements of the Southern Steer system, is considered a Competitive Business.
This definition is broad and covers various aspects of potential competition. For a prospective Southern Steer franchisee, this means they are restricted from operating or being involved with a wide range of businesses that could be seen as competing with Southern Steer, not only during the franchise term but also for a specified period afterward. Understanding this definition is essential for franchisees to avoid violating the covenant not to compete and facing potential legal consequences. Franchisees should carefully consider this definition and how it might impact their future business ventures.