Can the Southern Steer franchise agreement be immediately terminated if the franchisee attempts to register a trademark related to the system?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchisee will be deemed to be in Default subject to immediate termination of this Agreement and the rights granted herein or the exercise of any other remedies in accordance with Sections 20.4 and 20.5, without prior notice of the default from the Franchisor and without an opportunity to cure the Default unless precluded by applicable law or otherwise as stated herein, if any of the following events occur:
- (a) the Franchisee, Owners, Operating Principal or the Designated Manager(s) are convicted of, or plead guilty to a charge of violating any law relating to the Franchisee's Southern Steer Business or that adversely affects the operation, maintenance, reputation, or goodwill of the Southern Steer Business, System, the Marks or the Franchisor;
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 can be subject to immediate termination under certain default conditions. Specifically, immediate termination can occur without prior notice or an opportunity to cure the default if the franchisee violates any law relating to the Southern Steer business or that adversely affects the operation, maintenance, reputation, or goodwill of the Southern Steer business, System, the Marks or the Franchisor.
This means that if a Southern Steer franchisee attempts to register a trademark related to the Southern Steer system, it could be construed as an action that adversely affects the Marks or the Franchisor, leading to immediate termination of the franchise agreement. The franchisor can pursue this termination without providing prior notice or an opportunity for the franchisee to correct the action, unless such notice or opportunity to cure is required by applicable law.
This provision underscores the importance of franchisees adhering strictly to the franchisor's guidelines and respecting the franchisor's intellectual property rights. Prospective franchisees should be aware of these terms and ensure they fully understand the implications of any actions that could be interpreted as infringing upon the franchisor's trademarks or negatively impacting the brand's reputation. Franchisees should seek legal counsel to fully understand the scope of these restrictions and the potential consequences of non-compliance.