Where in the Southern Steer Franchise Agreement and MUDA are the franchisee's fee obligations described?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: ITEM. 22 CONTRACTS]
3. FEES.
- 3.1. PAYMENTS DUE AT TIME OF SIGNING FRANCHISE AGREEMENT. In consideration of the Southern Steer Business granted herein, the Franchisee must pay to Franchisor an initial franchise fee ("Initial Franchise Fee") set out in Attachment A for the right to operate one Southern Steer Business in the Protected Area. The Franchisee acknowledges and agrees that the Initial Franchise Fee is fully earned by Franchisor upon Franchisee's execution of this Agreement and is non-refundable under any circumstances.
- 3.2. PAYMENTS DUE AFTER SIGNING THE FRANCHISE AGREEMENT. In addition to other fees and charges as may be described elsewhere in this Agreement, Franchisee will pay the following fees and charges to Franchisor, its Affiliates or third parties, as designated by Franchisor. The fees and charges are not refundable under any circumstance.
- (a) Royalty Fee. Beginning the third month after Franchisee's Required Opening Date, the Franchisee will pay to the Franchisor a continuing weekly Royalty Fee based on Gross Revenues generated by the Franchisee's Southern Steer Business during the preceding Week as follows ("Royalty Fee"):
Source: Item 9 — ITEM. 9 FRANCHISEE'S OBLIGATIONS (FDD pages 24–25)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, Item 22, Section 3, outlines the franchisee's fee obligations within the Franchise Agreement. Specifically, Section 3.1 details payments due upon signing the Franchise Agreement, referencing Attachment A for the initial franchise fee required to operate a Southern Steer Business in the protected area. This fee is acknowledged as fully earned by Southern Steer upon the franchisee's execution of the agreement and is non-refundable. Section 3.2 further specifies payments due after signing the Franchise Agreement, including other fees and charges that the franchisee will pay to Southern Steer, its affiliates, or designated third parties, which are generally non-refundable. This section mentions the Royalty Fee, which begins in the third month after the franchisee's required opening date and is a continuing weekly fee based on Gross Revenues.
Item 4 also mentions that if a prospective franchisee signs a Multi-Unit Development Agreement (MUDA), they must pay the initial franchise fee for the first Southern Steer Business according to the Initial Franchise Agreement. Additionally, they must pay a development fee of $49,500 for the second Southern Steer Business and $42,000 for the third Southern Steer Business. The total Development Fee is due when the MUDA is signed and is fully earned by Southern Steer upon execution of the MUDA, being non-refundable even if the franchisee fails to develop additional Southern Steer Businesses under the MUDA.
Item 6 provides further details on other fees, noting that all fees and costs payable to Southern Steer, its affiliates, or designees are generally non-refundable, unless otherwise stated. Southern Steer retains the right to increase any fees due from the franchisee, as well as charges for products, materials, and services, based on reasonable judgment, excluding the Royalty Fee percentage. The item also discusses the option for Southern Steer to require franchisees to pay fees via EFT or automatic withdrawal, as described in the Franchise Agreement and/or Brand Manual, necessitating the franchisee's authorization for direct debits from their business bank account. If the franchisee signs the MUDA, the fees for the second and subsequent Franchise Agreements will be at the rate specified in Southern Steer's then-current form of Franchise Agreement.