Does the Franchisor's non-acceptance of the Multi-Unit Developer's offer affect the Multi-Unit Developer's obligations under the Southern Steer agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
The Multi-Unit Developer's obligations under this Agreement will in no way be affected or changed because of non-acceptance by the Franchisor of the Multi-Unit Developer's Offer and, as a consequence, the terms and conditions of this Agreement will remain in full force and effect.
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 Southern Steer's 2025 Franchise Disclosure Document, the Multi-Unit Developer's obligations under the agreement are not affected or changed if the Franchisor does not accept the Multi-Unit Developer's Offer. The terms and conditions of the Multi-Unit Development Agreement remain in full force and effect regardless of the Franchisor's decision on the offer. This ensures that the developer must continue to meet their contractual duties even if the Franchisor declines to purchase the Major Assets.
This provision protects Southern Steer by ensuring the Multi-Unit Developer remains committed to their development schedule and operational responsibilities, regardless of whether the Franchisor exercises its option to purchase the Major Assets. The Multi-Unit Developer cannot use the Franchisor's non-acceptance as a reason to terminate or alter their obligations under the agreement.
For a prospective Multi-Unit Developer, this means they must be prepared to fulfill all obligations outlined in the agreement, irrespective of the Franchisor's decision regarding the purchase of assets. This includes adhering to the development schedule, maintaining operational standards, and paying required fees. The developer should carefully consider their capacity to meet these obligations before entering into the agreement, as non-acceptance by Southern Steer does not provide grounds for altering or terminating these responsibilities.
This clause is designed to provide stability and commitment to the development plan, ensuring Southern Steer can rely on the Multi-Unit Developer to fulfill their agreed-upon duties, regardless of any potential asset sale negotiations with the Franchisor.