What happens to existing Southern Steer Franchise Agreements if the Multi-Unit Development Agreement is terminated due to failure to meet the Development Schedule?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Termination of this Agreement as a result of the Multi-Unit Developer's failure to meet the Development Schedule will not affect the individual Franchise Agreements for the Southern Steer Businesses opened and operating in the Development Territory pursuant to this Agreement which were signed by the parties prior to termination of this Agreement; however, upon termination of this Agreement, all rights to open and operate additional Southern Steer Businesses in the Development Territory and all other rights granted to the Multi-Unit Developer under this Agreement will immediately revert to the Franchisor, without affecting those obligations of the Multi-Unit Developer that continue beyond the
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 termination of a Multi-Unit Development Agreement due to failure to meet the Development Schedule does not impact the existing individual Franchise Agreements. This means that if a Multi-Unit Developer has already opened and is operating Southern Steer businesses under individual Franchise Agreements, those agreements remain in effect even if the Development Agreement is terminated.
However, upon termination of the Multi-Unit Development Agreement, the Multi-Unit Developer loses all rights to open and operate additional Southern Steer businesses within the designated Development Territory. These rights revert back to Southern Steer, allowing them to develop new locations themselves or contract with other parties for development.
The Multi-Unit Developer is still obligated to continue operating existing Southern Steer businesses in compliance with the terms of their individual Franchise Agreements, including the payment of all required fees. Southern Steer retains the right to develop additional businesses in the territory or contract with others to do so. The Multi-Unit Developer will not receive any refunds of monies paid to Southern Steer under either the Multi-Unit Development Agreement or the individual Franchise Agreements.