factual

Can a Southern Steer franchisee terminate the MUDA agreement?

Southern_Steer Franchise · 2025 FDD

Answer from 2025 FDD Document

Addendum for state law modifications). |#### THE MUDA RELATIONSHIP

This table lists certain important provisions of the Multi Unit Development Agreement and related agreements. You should read these provisions in the agreements attached to this Disclosure Document.

Provision Section in MUDA Summary
a. Length of agreement term 3 Begin on the Effective Date and end on the last
day of the calendar month that the final Southern
Steer Business is required to be developed and
opened under the Development Schedule
b. Renewal or extension of the Not applicable
term
c. Requirements for You to Not applicable
renew or extend
d. Termination by You Not applicable
e. Termination by franchisor Not applicable
without cause
f. Termination by franchisor 8.1 If you breach the MUDA.
with cause
g. "Cause" defined – curable defaults 8.2 We have the right (subject to state law) to terminate the MUDA upon 30-days' notice if You or Your Controlled Entity failed to comply with the standards and Brand Manual as described in any Franchise Agreement; You fail to obtain required approvals; or any other reason that constitutes good cause under applicable law.
h. "Cause" defined – non curable defaults 8.1 We have the right (subject to state law) to terminate the MUDA immediately upon receipt of notice if Multi-Unit Developer (You): fail to cure the default of your Development Schedule in the MUDA; cease to engage in development activities; fail to pay uncontested obligations or liabilities, are deemed insolvent; make an assignment for the benefit of creditors; or Your Owners, Operating Principal, Executive Management, Guarantors or Controlled Entity are convicted of, or plead guilty to or no contest to a charge of violating any law or materially violates any federal, state or municipal law, rule, code or regulation applicable to the operations of the Multi-Unit Developer's or Controlled Entity's Southern Steer Businesses, breaches any provision, term or condition of this Agreement or any Franchise Agreement or other agreement between Multi-Unit Developer or Controlled Entity and Franchisor or its Affiliates and fails to cure such default within the period
Provision Section in Summary
MUDA
---- --------------------------------------------- -------------------- -------------------------------------------------------------------------------------------------------------- --
prescribed; any check or EFT issued by the
Multi-Unit Developer or Controlled Entity is
dishonored; are involved in any act or conduct
which
materially
impairs
the
goodwill
associated with "Southern Steer Butcher," any
other of the Marks or with the System that is not
cured
within
24
hours;
engages
in
any
unauthorized business or practice or sells any
unauthorized product or service under the
Franchisor's Marks, any Franchise Agreement
between You and Franchisor is terminated; or
Your Owners, Operating Principal, Executive
Management, Guarantors or Controlled Entity
breach the non-compete and confidentiality
covenants in the Franchise Agreement; two or
more
defaults
in
a
Development
Period
regardless of whether the defaults are cured; or
assign the MUDA or rights therein without
complying with Section 7.2.
i. Your 8.4 and 8.7 Your rights under MUDA revert to Us and You
obligations
on
termination/non-renewal must continue to operate the Southern Steer
Business You opened before termination of the
MUDA. We also reserve the right to purchase
Your opened Southern Steer Business from
You.
j. Assignment of the contract 7.1 No restrictions on Our right to assign the
by franchisor MUDA.
k. "Transfer" 7.2, 7.3, 7.4 You may not transfer your rights under the
by
You
–
definition MUDA except to an Approved Affiliate.
l. Franchisor 7.2 We have the right to approve of any transfer.
approval
of
transfer by area developer
m. Conditions for franchisor 7.3, 7.4 You must provide to Us an executed copy of all
approval of transfer assignment documents.
n. Franchisor's right of first 9 You must offer MUDA and Your ownership
refusal interests to Us if You receive a bona fide offer
to
acquire
area
developer's business to purchase.
o. Franchisor's 9 We have the option to purchase at the price and
option
to
purchase area developer's terms stated in the third-party offer. We also
business have the right to purchase Your Southern Steer
Business(es)
if Your MUDA
is terminated.
p. Death or disability of area None
developer
q. Noncompetition covenants 11 Comply with the terms
in
the
Franchise
during Agreement.
the
term
of
the
Development Agreement
r. Non-competition covenants 11 Comply with the terms
in
the
Franchise
after Agreement.
the
franchise
is
terminated or expires
Provision Section in Summary
MUDA
---- --------------------------------------------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- --
s. Modification 15.4 Only by written agreement between the parties.
of
the
agreement
t. Integration/merger clause 15.5 Only the terms of the MUDA are binding
(subject to state law). Any representations or
promises outside of this Disclosure Document
and the MUDA
may not be enforceable.
u. Dispute resolution by arbitration or mediation 14 Except for certain claims, all disputes must be submitted to mediation and arbitration.
v. Choice of forum 14.5 Florida subject to applicable state law (see
attached
Addendum
for
state
law
modifications).
w. Choice of law 14.6 Florida subject to applicable state law (see
attached
Addendum
for
state
law
modifications).

These additional disclosures appear in the Addendum attached to this Disclosure Document.

ITEM. 18 PUBLIC FIGURES

We do not use any public figure to promote its franchise. No public figure is involved in Our management.

ITEM. 19 FINANCIAL PERFORMANCE REPRESENTATIONS

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the Disclosure Document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet You are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.

This Item 19 includes historical information for all Southern Steer Businesses that have met the following conditions ("Conditions"): (a) operated for all of January 1, 2024 thru December 31, 2024; ("Reporting Period"); and (b) have operated for at least two years. Of the six franchised owned Southern Steer Businesses and the one Affiliate owned Southern Steer Business operating at the end of the Reporting Period, three (43%) of the opened Southern Steer Businesses met the Conditions and are included in this Item 19. Of the three included, two are franchised and one is owned by our Affiliate.

Source: Item 17 — ITEM. 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–50)

What This Means (2025 FDD)

According to the 2025 Southern Steer Franchise Disclosure Document, the table in Item 17 outlines the conditions for termination of the Multi-Unit Development Agreement (MUDA). Specifically, it indicates that termination by the franchisee ('You') is 'Not applicable,' meaning the franchisee does not have the right to terminate the MUDA.

However, the franchisor, Southern Steer, has the right to terminate the MUDA under certain conditions. These include termination with cause if the franchisee breaches the MUDA, as detailed in Section 8.1. Curable defaults, as defined in Section 8.2, allow Southern Steer to terminate the MUDA with 30 days' notice if the franchisee fails to comply with the standards and Brand Manual described in any Franchise Agreement, fails to obtain required approvals, or for any other reason that constitutes good cause under applicable law.

Southern Steer can also terminate the MUDA immediately upon notice for non-curable defaults, as outlined in Section 8.1. These defaults include failing to cure a default in the Development Schedule, ceasing development activities, failing to pay uncontested obligations, insolvency, assignment for the benefit of creditors, or if the franchisee's Owners, Operating Principal, Executive Management, Guarantors, or Controlled Entity are convicted of violating any law, breach the agreement, or engage in conduct that materially impairs the goodwill associated with the Southern Steer brand. Additionally, termination can occur if any Franchise Agreement between the franchisee and Southern Steer is terminated.

In summary, while a Southern Steer franchisee cannot unilaterally terminate the MUDA, the agreement can be terminated by Southern Steer if the franchisee fails to meet certain obligations or breaches the terms of the agreement. Prospective franchisees should carefully review Sections 8.1, 8.2, 8.4, and 8.7 of the MUDA to fully understand the conditions under which termination can occur and their obligations upon termination.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
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