How does the Southern Steer Franchise Agreement define the term 'Franchisee'?

The Franchisee acknowledges and agrees that it would be commercially unreasonable and damaging to the integrity of the System if a franchisee or developer could default and then escape the financial consequences of its contractual commitment to meet payment obligations for the term of a franchise agreement.

The Franchisee will sign a general release in favor of the Franchisor if the Franchisor chooses to waive its rights to collect any amounts that would have become due if the Franchisee had continued in business for the Initial Term of this Agreement.

• 20.8.

Franchisor's Right to Acquire the Southern Steer Business.

In addition to all of the other rights granted to Franchisor in this Section 20 upon termination of this Agreement, Franchisor has the right to acquire all right, title and interest in the assets of the Franchisee's Southern Steer Business, including all real property owned by Franchisee or its Affiliates (if Franchisee has opened the Southern Steer Business pursuant to an Multi-Unit Development Agreement between Franchisee's Affiliate and Franchisor) from which the Southern Steer Business is operated.

Franchisor must notify Franchisee of its intention to acquire the Southern Steer Business at the time Franchisor sends the final notice of termination and must comply with all other provisions related to the acquisition set forth in the Brand Manual.

In addition, the parties agree that the purchase price for the Southern Steer Business will be calculated in accordance with the terms and procedures set forth in the Brand Manual.

• 20.9.

Franchisee's Termination.

A termination of this Agreement by Franchisee or any action by Franchisee to convert its Southern Steer Business to another business in violation of this Agreement will be deemed to be a termination without cause and a breach hereof, by Franchisee and (a) such actions will not relieve Franchisee of, or release Franchisee from, any of its obligations under this Agreement; (b) Franchisee's obligations under this Agreement will remain in full force and effect; and (c) Franchisee will be obligated to fully perform all terms and conditions of this Agreement until such time as this Agreement expires or is terminated in accordance with the provisions of this Agreement and applicable law.

• 20.10.

Set Off.

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The Franchisee is solely responsible for ascertaining what actions must be taken by it to comply with all such laws, orders and/or regulations, and specifically acknowledges and agrees that its indemnification responsibilities as provided in Section 17.4 of this Agreement pertain to its obligations hereunder.

9.4.

Franchisee's Operations.

• (a) Required Opening Date.

Franchisee must open the Southern Steer Business to the general public and commence operations by the Required Opening Date set out in Attachment A.

• (b) Best Efforts.

Franchisee agrees at all times during the Initial Term and any Interim Period to faithfully, honestly and diligently perform Franchisee's obligations under this Agreement, including in the promotion and development of Franchisee's Southern Steer Business in Franchisee's Protected Territory.

• (c) Conduct.

Franchisee will at all times cooperate with Franchisor, existing and prospective Southern Steer franchisees, and Affiliates in accomplishing the purpose of this Agreement.

Franchisee agrees, at all times, to give prompt, courteous, friendly, and efficient service to all current and prospective customers.

Franchisee agrees to adhere to the highest standards of honesty, integrity, fair dealing and ethical conduct when dealing with current and prospective customers, suppliers, Franchisor, Affiliates and the public.

• (d) Presentation Of Uniform Image.

The presentation of a uniform image to the public is an essential element of the System.

Franchisee will maintain the image of the Southern Steer Business at all times in accordance with Franchisor's standards and specifications, including: (i) ensuring that the Franchised Location is maintained in a clean and orderly manner; (ii) ensuring that all FF&E remain in good, clean condition and inventory is properly displayed; and (iii) only offering such types of products, food items and services, including Food, Beverages and Products, that Franchisor authorizes from time to time for use by Franchise's Southern Steer Business as set forth in the Brand Manual and this Agreement.

• (e) Cooperation.

Franchisee agrees to cooperate with and communicate directly with Franchisor.

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• i.

The Franchisee must provide written evidence to the Franchisor that the Franchisee either owns or has the right to lease the Franchised Location for at least five additional years after the end of the Initial Term or preceding Successor Term, as the case may be;

• ii.

The Franchisee must sign Franchisor's then-current form of franchise agreement ("Successor Franchise Agreement"), which may include terms and conditions materially different from those in this Agreement, such as different performance standards, fee structures and/or increased fees, and an option to operate the Southern Steer Business for any additional terms;

• iii.

In lieu of paying the Initial Franchise Fee specified in the Successor Franchise Agreement, the Franchisee must pay to Franchisor the Successor Franchise Fee set out in Section 3.2(j) at least 90 days before renewing Franchisee's right to operate the Southern Steer Business;

• iv.

The Franchisee must execute a general release in a form satisfactory to Franchisor of any and all claims against Franchisor, its parent, subsidiaries or Affiliates (if applicable) and their officers, directors, attorneys, Owners and employees;

• v.

The Franchisee (or its Operating Principal) and its Designated Manager must complete any new training requirements designated by the Franchisor;

• vi.

The Franchisee must agree in writing to make, within six months after the effective date of the Successor Franchise Agreement, all capital expenditures necessary to remodel the Franchised Location, as determined by the Franchisor, to comply with the then-current Southern Steer Businessimage, décor, and specifications established by the Franchisor, and provide evidence to the Franchisor's reasonable satisfaction that the Franchisee has received a written loan commitment from a commercial lender for the amount of the estimated cost of the remodeling or has the financial capability of making such expenditures;

• vii.

The Franchisee, Owners, Guarantor(s) and Designated Manager must be in compliance with Franchisor's then current qualifications and standards; and

• viii.

Franchisee must have all licenses, insurance, registrations and approvals required by Franchisor or applicable governing authority to operate the Southern Steer Business in the Protected Area.

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2. TERM OF AGREEMENT.

• 2.1. Term. The initial term ("Initial Term") of this Agreement will commence on the Effective Date and will be for a period of 10 years, unless terminated sooner in accordance with this Agreement. The Initial Term may be extended under certain circumstances to coincide with the term of the lease for Franchisee's Southern Steer Business. This Agreement will not be enforceable until it has been signed by both the Franchisee and the Franchisor.

• 2.2. Successor Term. Provided that, at the end of the Initial Term of this Agreement or any Successor Term, as the case may be, (a) the Franchisee has timely complied with all terms and conditions of this Agreement, including the timely payment of all Royalty Fees, Brand Fund Contribution Fees, Local Advertising Cooperative Fees, and other Fees due to the Franchisor; (b) the Franchisee is not in default of the lease for the Franchised Location, if any; (c) the Franchisee has paid or satisfied all monetary obligations owed by the Franchisee to the Franchisor, Franchisor's Affiliates, Approved Suppliers, and Designated Suppliers; (d) the Franchisee is not in default under this Agreement at the time Franchisee provides written notice; and (e) the Franchisee has not been in default under this Agreement more than two times in any 12 month period or more than six times during the Initial Term (or the immediately preceding Successor Term, as the case may be) regardless of whether or not such default has been cured, the Franchisee may, at its option, have the right to operate the Southern Steer Business at the Franchised Location for an additional Successor Term commencing on the end of the Initial Term (or immediately preceding Successor Term, as the case may be). The Franchisee must exercise its option for a Successor Term by giving the Franchisor written notice of Franchisee's election to do so at least 180 days and no more than one year prior to the expiration of the Initial Term (or immediately preceding Successor Term, as the case may be). As a condition for any Successor Term, the Franchisee must cause all of the following to occur:

• i.

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• (h) 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, then the Franchisee will notify the Franchisor in writing and within five business days the Franchisee will require the new Owner to execute all documents then required by the Franchisor;

• (i) The Franchisee's Organizational Documents and any documents representing Ownership in the Franchisee will provide that no Ownership Interest in the Franchisee may be assigned or transferred to any person or entity unless it is in strict compliance with the terms, conditions and restrictions contained in this Agreement;

• (j) Each of the Franchisee's Owners will execute the Personal Guaranty attached hereto as Attachment C and the Non-competition and Non-Disclosure Agreement attached hereto as Attachment I-1; and

• (k) The Franchisee will, at all times, maintain sufficient working capital to operate the Southern Steer Business and to fulfill its obligations under this Agreement, and will take steps to ensure availability of capital to fulfill the Franchisee's obligations to maintain, remodel and modernize the Southern Steer Business premises as required under this Agreement.

• 24.2.

Financial Obligations.

The Franchisee has no material liabilities, adverse claims, commitments or obligations of any nature as of the date of this Agreement, whether accrued, unliquidated, absolute, contingent or otherwise, except as disclosed to the Franchisor in writing or set forth in the financial statements of the Franchisee that have been provided to the Franchisor.

• 24.3.

Compliance with Agreement.

The Franchisee and the Owners represent, warrant and covenant that they will comply with all requirements and will perform all obligations in accordance with the terms and conditions of this Agreement.

• 24.4.

Disclosure Document and Franchise Agreement.

Franchisee have received 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.

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• B. Lessor acknowledges that Lessee intends to operate a Southern Steer Business franchise from the leased Premises pursuant to a Franchise Agreement ("Franchise Agreement") with Southern Steer Franchising International, LLC ("Franchisor") under the name "Southern Steer Butcher" or other name designated by Franchisor (herein referred to as "Franchised Southern Steer Business").
• C. The parties now desire to amend the Lease in accordance with the terms and conditions contained herein.

NOW, THEREFORE, it is hereby mutually covenanted and agreed between Lessor and Lessee as follows:

Remodeling and Decor.

Lessor agrees that Lessee will have the right to remodel, equip, paint and decorate the interior of the Premises and to display the proprietary marks and signs on the interior and exterior of the Premises as Lessee is reasonably required to do pursuant to the Franchise Agreement and any successor Franchise Agreement under which Lessee may operate a Franchised Southern Steer Business on the Premises.

Assignment or Subletting.

Lessee will agree to attorn to any assignee of Lessor provided such assignee will agree not to disturb Lessee's possession of Premises.

Lessee will have the right to assign or sublet all of its right, title and interest in the Lease, at any time during the term of the Lease, including any extensions or renewals thereof, without charge and without first obtaining Lessor's consent in accordance with the Collateral Assignment of Lease attached hereto as Attachment G-1: (a) to Franchisor or Franchisor's parent, subsidiary, or affiliate, (b) to a duly authorized franchisee of Franchisor, (c) in connection with a merger, acquisition, reorganization or consolidation, or (d) in connection with the sale of Lessee's corporate stock or assets.

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The Franchisee will not be required to modify or replace the Signs more than once every five years from the Effective Date of this Agreement.

• 5.10.

Ownership of Franchised Location.

If the Franchisee, any of the Owners, or an Entity owned by the Franchisee and/or any of the Owners, owns, leases or otherwise controls the Franchised Location, including the land, building and related real estate, or if the Franchisee, any of the Franchisee's Owners, or an Entity owned by the Franchisee and/or any of the Owners owns 50.1% or more of an Entity that owns, leases or otherwise controls the Franchised Location, then the Franchisee will, as the lessee, enter into a Lease for the Franchised Location for a term coextensive with the Initial Term of this Agreement containing terms and conditions that are commercially reasonable and substantially similar to a commercial lease that would be executed by unrelated parties in an arm's length transaction for similarly situated real estate.

The Lease will be deemed to be a Major Asset of the Franchisee.

This provision will not apply if the Franchisee owns the Franchised Location, and the Franchised Location is reflected as an asset on the Franchisee's Financial Statements, in which event, the Franchised Location will not be deemed a Major Asset of the Franchisee.

• 5.11.

Remodeling of Franchised Location.

The Franchisee will make the reasonable capital expenditures necessary to extensively remodel, modernize, redecorate and renovate ("remodel" or "remodeling") the Franchisee's Southern Steer Business and to replace and modernize the FF&E so that the Franchisee's Southern Steer Business will reflect the then-current image of a Southern Steer Business and conform to the Franchisor's then-current specifications.

The Franchisee acknowledges and agrees that the requirements t

Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)