What is the Franchisee required to execute regarding the lease for the Southern Steer franchise?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
hereby the Franchisee agrees to assign the Franchisee's rights in the Lease to the Franchisor in the event of a termination or expiration of the term of this Agreement or a default under the Lease. The Franchisee will provide executed copies of the Lease or purchase closing documents for the Franchised Location within 10 days after their execution. Franchisee will be required to execute a lease that complies with this Section within 90 days after the Effective Date.
- 5.4. Site Release. The Franchisor will have no duty or obligation to assist the Franchisee in the selection of a site for the Franchised Location, or to provide any assistance to the Franchisee in the purchase or lease of the Franchised Location.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, a franchisee is required to execute a lease that adheres to specific requirements within 90 days of the effective date of the franchise agreement. Before signing the lease, the franchisee must ensure that the agreement has been signed by both parties and that the lease contains the terms outlined in the agreement, including those in the Form of Lease Addendum (Attachment F).
Prior to signing, the franchisee must provide Southern Steer with a copy of the proposed lease at least 30 days in advance. Southern Steer may offer assistance in negotiating the lease terms, but is not required to do so. The review of the lease by Southern Steer is primarily to ensure compliance with the franchise agreement, not to provide business, economic, legal, or real estate advice. The franchisee bears sole responsibility for all lease terms, including their enforceability, economics, and legality.
The lease's enforceability must be contingent on Southern Steer approving the franchisee and the franchise agreement. The franchisee must also strive to secure terms and conditions from the lessor that align with the franchise agreement and the Form of Lease Addendum. The lease must grant Southern Steer the right to inspect the premises during regular business hours. Additionally, the franchisee must execute a Collateral Assignment of Lease (Attachment F-1), which assigns the franchisee's rights in the lease to Southern Steer in the event of termination, expiration, or default.
Within 10 days of execution, the franchisee must provide Southern Steer with executed copies of the lease or purchase closing documents. If the franchisee, or an entity controlled by the franchisee, owns, leases, or controls the franchised location, they must enter into a lease with commercially reasonable terms similar to those in an arm's length transaction for comparable real estate, with a term coextensive with the initial term of the franchise agreement.