For a Southern Steer franchise, does the definition of 'Competitive Business' include businesses that operate similarly to a Southern Steer Business?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
uding prospective and existing franchisees anywhere within or outside of the Development Territory;
- (d) To acquire businesses that are the same as or similar to the Southern Steer Business and operate such businesses anywhere within or outside of the Development Territory and to be acquired by any third party which operates businesses that are the same as or similar to the Southern Steer Business anywhere within or outside of the Development Territory;
- (e) To market, distribute and sell, on a wholesale or retail basis, food products, prepackaged food, ancillary products and other goods, by direct sale, wholesale, the Internet, mail order, food truck, food trailer, third-party delivery services, other alternative distribution channels or by any other marketing or distribution method that may use the System under the Marks or other marks within or outside of the Development Territory;
- (f) To implement multi-area marketing programs and delivery service programs which may allow Franchisor or others to solicit or sell to customers anywhere and Franchisor has the right to issue mandatory policies to coordinate such multi-area marketing programs; and
- (g) To operate Southern Steer Businesses from Non-Traditional Locations anywhere.
- Personal License.
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 franchisor retains the right to acquire businesses that are the same as or similar to the Southern Steer Business and operate such businesses anywhere, even within or outside a franchisee's protected area. This also extends to being acquired by a third party that operates similar businesses. This clause indicates that Southern Steer does not restrict itself from engaging in businesses that directly compete with its franchisees, even within their territories.
Southern Steer also reserves the right to offer and sell products and services sold at Southern Steer Businesses under different names and through alternative distribution channels. They can also offer and sell products and services for other businesses and market these businesses to anyone, including existing franchisees, regardless of location. Furthermore, Southern Steer can market, distribute, and sell food products and other goods through various methods, including wholesale, internet, and third-party delivery services, within or outside a franchisee's protected area.
These stipulations in the franchise agreement mean that a Southern Steer franchisee could face competition from the franchisor itself or from other businesses acquired or operated by Southern Steer. This could impact the franchisee's market share and profitability, as Southern Steer has the freedom to explore different business models and sales channels that might overlap with the franchisee's operations. Prospective franchisees should carefully consider these competitive risks and evaluate how they might affect their business before investing in a Southern Steer franchise.