Is a Southern Steer franchisee required to reimburse the franchisor for certain costs?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
and (d) evaluate the quality of the Foods, Beverages and Products, other products, and the services provided by the Franchisee to its customers. The Franchisor will have the right to use all interviews, photographs and videotapes of the Franchisee's Southern Steer Business for such purposes as the Franchisor deems appropriate, including use in advertising, marketing and promotional materials, without any approval of or any compensation to the Franchisee.
- 14.5. Payment of Audit Costs. If an audit establishes that the Franchisee's Gross Revenues were understated by more than 2% in any payment period or fiscal year, then the Franchisee will, within 10 days after receipt of an invoice, pay the Franchisor for all costs and expenses incurred for the audit of the Franchisee's Financial Records (including employee Salaries and Benefits, Travel Expenses, and audit fees).
- 14.6. Under-Reporting. If it is found that the Franchisee under-reported Gross Revenues, the Franchisee will reimburse the Franchisor of the amount of the Fees that would have been due had Gross Revenues been reported accurately, plus Interest each month in the amount set out in Section 3.3(c).
- 14.7. Late Reporting. If the Franchisee fails to send the Franchisor any report that is due on a weekly basis, the Franchisor may charge the Franchisee, to the extent permitted by applicable law, its then current late report fee. Currently, the late report fee is $100 for each Week the reports are late. If Franchisee fails to send the Franchisor any report that is due on a monthly basis, annual basis, or quarterly basis, the Franchisor may charge the Franchisee, to the extent permitted by law, its then current late report fee. Currently, the late report fee is $100 for each month the report is late.
- 14.8. Disclosure. The Franchisor will have the right to disclose in its Franchise Disclosure Document as required by law, and in other documents and places as determined by the Franchisor, any information relating to the Southern Steer Business, including the Franchisee's name, any address and/or telephone number(s), Gross Revenues, expenses, results of operations and/or other information. Any disclosure by the Franchisor will be for reasonable Southern Steer Business purposes, and its rights under this provision will survive the Transfer, termination or expiration of this Agreement.
- 14.9. Ownership of Southern Steer Business Records. The Franchisee acknowledges and agrees that the Franchisor will at all times have unrestricted access to all Southern Steer Business records ("Southern Steer Business Records") with respect to customers, and other service professionals of, and/or related to, the Southern Steer Business including, without limitation, all databases (whether in print, electronic or other form), including all names, addresses, phone numbers, e-mail addresses, customer purchase records, and all other records contained in the database and all other Southern Steer Business Records created and maintained by the Franchisee are the sole property of the Franchisor. The Franchisee further acknowledges and agrees that all Southern Steer Business Records are the sole property of the Franchisor.
**15.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, franchisees may be required to reimburse the franchisor for several different types of costs under specific circumstances. If an audit reveals that the franchisee understated gross revenues by more than 2% in any payment period or fiscal year, the franchisee must cover all audit costs and expenses, including employee salaries and benefits, travel expenses, and audit fees. Additionally, if a franchisee under-reports gross revenues, they must reimburse Southern Steer for the underpaid fees, plus interest.
Southern Steer franchisees are also responsible for all federal, state, and local taxes related to their business. If any tax based on the franchisee's gross revenues or business activities is imposed on Southern Steer, the franchisee must reimburse Southern Steer for these taxes within 15 days of receiving an invoice. Furthermore, if a franchisee fails to correct deficiencies in their Southern Steer Business and Southern Steer steps in to correct them, the franchisee will reimburse Southern Steer for the actual costs incurred, including travel and living expenses.
Other instances where reimbursement may be required include fees for relocation, testing new products or suppliers, and technology. Specifically, the relocation fee is equal to the costs Southern Steer incurs for site review and approval, including travel, living, and legal expenses. If a franchisee wants to introduce new products or suppliers, they will pay Southern Steer's actual costs for testing and inspection, including travel and living expenses. Franchisees will also pay the then current set up fee and technology fee to Southern Steer or their designated supplier. Finally, if a franchisee sells unauthorized products or uses unauthorized suppliers, they will pay Southern Steer $250 per day for each violation.