For a Southern Steer franchise, what is included in 'Labor Costs'?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
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- "Labor Costs" includes the wages to hourly employees, managers and assistant managers.
Labor costs do not include the salaries for any general managers, administrative staff, payroll taxes or benefits (such as bonuses or insurance).
You may elect to manage the day-to-day operations of a Southern Steer Business and operate with fewer employees.
However, if You do not elect to manage the day-to-day operations of the Southern Steer Business, or if business volume so requires, You may need additional hourly employees or a general manager to operate Your Southern Steer Business.
If you operate more than one Southern Steer Business, you may also need a general manager(s).
Source: Item 19 — ITEM. 19 FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 50–58)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, "Labor Costs" include specific wage-related expenses but exclude others. For the locations examined in Item 19, the labor costs include wages paid to hourly employees, managers, and assistant managers.
However, the definition of "Labor Costs" specifically excludes salaries for general managers and administrative staff. It also excludes payroll taxes and employee benefits, such as bonuses or insurance. This means a franchisee evaluating potential profitability needs to account for these additional payroll-related expenses separately from the stated "Labor Costs."
The FDD notes that a franchisee may choose to manage the day-to-day operations of their Southern Steer business, which could reduce the number of employees needed. However, if the franchisee does not manage daily operations or if business volume increases, additional hourly employees or a general manager may be necessary, impacting overall labor expenses. If a franchisee operates more than one Southern Steer location, they may also need to hire one or more general managers.