Does the Southern Steer franchise agreement establish a fiduciary relationship between the franchisor and the multi-unit developer?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
The Multi-Unit Developer and Controlled Entity acknowledge and agree that the officers, directors, employees, and agents of the Franchisor act only in a representative capacity and not in an individual capacity, and that no other persons and/or Entities other than the Franchisor has or will have any
duties or obligations to the Multi-Unit Developer or any Controlled Entity under this Agreement.
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 franchise agreement does not establish a fiduciary relationship between Southern Steer and the multi-unit developer. The agreement explicitly states that the officers, directors, employees, and agents of Southern Steer act only in a representative capacity and not in an individual capacity. It further clarifies that no entities other than Southern Steer have any duties or obligations to the Multi-Unit Developer under the agreement.
This indicates that the relationship is structured as an arm's-length business arrangement rather than one of special trust or confidence. Multi-unit developers are expected to conduct their own independent investigations and recognize the business and economic risks involved in operating Southern Steer businesses. The success of the venture is primarily dependent on the multi-unit developer's efforts, management, and prevailing economic conditions.
Furthermore, the FDD emphasizes that multi-unit developers should seek independent legal counsel to review the Franchise Disclosure Document, the agreement, and other relevant aspects of the business. This recommendation reinforces the understanding that multi-unit developers are responsible for protecting their own interests and making informed decisions based on their own due diligence and expert advice, rather than relying on a fiduciary duty from Southern Steer.