Does the Southern Steer Franchisor reserve discretion in the Franchise Agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
nchised Location described in Attachment A. The rights granted to Franchisee by this Agreement are limited to the Protected Area and are subject to the reservation of rights described in Section 1.2(a).
- 1.2. Reservation of Rights. Franchisee acknowledges that the license granted hereunder, including in Section 1.1 is non-exclusive and, notwithstanding anything contained in this Agreement to the contrary, the following rights are reserved to Franchisor and its Affiliates and their successors and assigns:
- (a) Except as provided for in Section 1.4, to use, and license the use of, the System or component(s) thereof, for the operation of Southern Steer Businesses inside or outside Franchisee's Protected Area, regardless of proximity to the Protected Area and the Franchised Location;
- (b) To offer and sell any products and services sold at Southern Steer Businesses under any other names and marks, including through alternative channels of distribution;
- (c) To offer and sell, and/or license or franchise others to offer and sell, products and services for Other Businesses and market Other Businesses to anyone, including prospective and existing Franchisees anywhere within or outside of Franchisee's Protected Area;
- (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 Franchisee's Protected Area 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 Franchisee Protected Area;
- (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 trademarks within or outside of Franchisee's Protected Area;
- (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 delivery service programs; and
- (g) To operate Southern Steer Businesses from Non-Traditional Locations anywhere.
- 1.3. Undetermined Franchised Location. The Franchised Location is described in the Attachment A. If the Franchised Location has not yet been determined as of the Effective Date of this Agreement, then when the address of the Franchised Location is determined, the street address, city and state for the Franchised Location will be inserted in Attachment A to this Agreement and signed by both the Franchisor and the Franchisee. Franchisor reserves the right to terminate the Franchise Agreement if Franchisee fails to provide Site Information for the Franchised Location and fails to lease a site for the Franchised Location, approved by Franchisor, within 90 days after the Effective Date of this Agreement.
- 1.4. Protected Area. Except as provided to the contrary in this Section, the Franchisee will receive the nonexclusive "Protected Area" defined in the Attachment A attached to this Agreement. Subject to the reservation of rights set out in Sections 1.2 (b)-(g) and Section 1.6 and so long as the Franchisee is not in default of this Agreement or any other agreement with Franchisor or any of Franchisor's Affiliates past applicable cure periods, the Franchisor and its Affiliates will not have the right to own, operate, franchise or license others to own or operate a Southern Steer Business physically located within the Franchisee's Protected Area, with the exception of Non-Traditional Locations.
- 1.5. Relocation. Provided the Franchisee is not in default of this Agreement, the Franchisee may, with the prior written approval of the Franchisor, relocate the Franchised Location if (a) there is a compelling business reason in terms of the site criteria and target market specifications presented to us for a new location and the new location is within Franchisee's Protected Area, regardless of whether another Southern Steer Business is placed nearby or (b) if Franchisee's current Franchised Location is an underperforming Southern Steer Business and the specifics of the relocation ensure an impact on overall profitability of such Southern Steer Business. The new Franchised Location of the Southern Steer Business, including the real estate and the building, must comply with the Franchisor's then-current image, décor, standards and specifications. The Franchisee will pay the Franchisor the Relocation Fee set out in Section 3.2(f). The Franchisee will pay the Relocation Fee amount upon Franchisor's approval of Franchisee's relocation request. In order to receive approval to relocate, the Franchisee may be required to sign the Franchisor's then-current Franchise Agreement for a full initial franchise term as provided in the Franchisor's then-current Franchise Agreement and execute a general release in a form satisfactory to Franchisor of any and all claims against Franchisor, its parent, subsidiaries and Affiliates (if applicable) and their respective officers, directors, attorneys, Owners and employees. The Franchisee will pay the Franchisor a fee of $500 per Week during all Weeks that the Franchisee's Southern Steer Business is closed due to relocation.
1.6. Minimum Sales.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, Southern Steer reserves several rights within the Franchise Agreement. These rights allow Southern Steer to operate and license the System, even within a franchisee's protected area, with some exceptions. They can also sell similar products under different names through various distribution channels. Southern Steer retains the right to engage in other business ventures and market them to anyone, including existing franchisees, regardless of location. Additionally, Southern Steer can acquire similar businesses and be acquired by other entities in the same or similar industries, irrespective of a franchisee's protected area. They can also market and sell food products through various methods, including online and third-party delivery services. Southern Steer can implement multi-area marketing and delivery programs and operate Southern Steer businesses from non-traditional locations.
Southern Steer also has the right to appoint an interim manager to operate a franchisee's Southern Steer Business if the franchisee is unable to do so for an extended period (45 days or longer, or 15 days under specific conditions). In such cases, Southern Steer will manage the business, retain revenue in a separate account, cover expenses, and retain 50% of gross revenues as a management fee. However, Southern Steer is not required to operate the business and may exercise these rights at its discretion.
Furthermore, Southern Steer maintains control over the brand's online presence. Franchisees cannot establish websites or social media to promote their Southern Steer Business without prior written approval. Southern Steer has the sole right to promote the business's products online and can create websites and mobile applications using the "Southern Steer Butcher" name. Southern Steer also reserves the right to establish, modify, or discontinue an Online Ordering/Delivery System, requiring franchisees to participate and comply with its requirements if implemented. These stipulations grant Southern Steer significant latitude in directing the brand's overall strategy and protecting its interests, which may impact a franchisee's operational autonomy and marketing strategies.