Can the Southern Steer Franchisor unilaterally transfer and assign the Multi-Unit Development Agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
7. ASSIGNMENT.
- Assignment and Transfer of Agreement by the Franchisor.
This Agreement may be unilaterally Transferred and assigned by the Franchisor to a person or Entity without the approval of the Multi-Unit Developer and will inure to the benefit of the successors and assigns of the Franchisor.
Source: Item 5 — and 7 of the FDD, Section 3.1 of the Franchise Agreement and Section 4.1 of the Multi-Unit Development Agreement are hereby amended to state that payment of the initial franchise fee and development fee will be deferred until We have satisfied Our pre-opening obligations, and You have commenced business operations. (FDD pages 168–290)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, Southern Steer can unilaterally transfer and assign the Multi-Unit Development Agreement to another person or entity without needing the multi-unit developer's approval. This transfer will benefit Southern Steer's successors and assigns.
This means that a prospective Southern Steer multi-unit developer should be aware that Southern Steer has the right to sell or transfer the agreement to another party without the developer's consent. This could potentially change the nature of the relationship and the terms under which the developer operates. The new entity taking over the agreement would then be the one the developer has to work with for future business operations.
While Southern Steer has the right to transfer the agreement, the multi-unit developer also faces restrictions on their ability to transfer. The multi-unit developer cannot transfer the agreement or their ownership interests to any entity involved with a competitive business. Any transfer requires Southern Steer's written consent and a fully executed copy of all assignment documents. Attempted assignments without complying with these requirements will be considered void.
These stipulations are typical in franchising to allow the franchisor flexibility in business dealings while protecting the brand and system. However, it's crucial for a prospective multi-unit developer to fully understand the implications of Southern Steer's transfer rights and the restrictions placed on their own ability to transfer the agreement.