What happens to the Southern Steer franchise agreement if the franchisee becomes permanently disabled?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
iary must agree to be unconditionally bound by the terms and conditions of this Agreement and must successfully complete the Initial Training Program. There will be no charge to the Beneficiary for attending the Initial Training Program; however, the Salary and Benefits and the Travel Expenses of the Beneficiary must be paid by the Beneficiary. Notwithstanding the forgoing, if this Agreement is Transferred to a Beneficiary, the Franchisee must pay the Franchisor $1,000 prior to the Transfer for legal expenses incurred by Franchisor to prepare transfer documents.
- (b) Failure to Transfer to Beneficiary. If the Beneficiary is unable to meet the conditions of Section 18.2(a), Franchisee or its estate, executor, administrator, conservator or other personal representative will have a reasonable time, not to exceed 180 days, from the date of such death, permanent disability, insanity, or appointment of a conservator or guardian, to dispose of Franchisee's interest, subject to the conditions set out in Section 18.5. Failure to so dispose of Franchisee's interest within 180 days will constitute a breach of this Agreement.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, if a franchisee becomes permanently disabled, their estate or representative has a 180-day period to dispose of the franchise interest, provided they meet specific conditions. If the beneficiary designated in the franchise agreement cannot meet the conditions for transfer, the franchisee's estate has roughly six months to sell the Southern Steer business, subject to conditions outlined in another section of the agreement. Failure to dispose of the interest within this timeframe constitutes a breach of the agreement.
Within 15 days of the franchisee's permanent disability, an interim manager, pre-approved by Southern Steer, must be appointed to oversee the business operations until the rights to the Southern Steer business are assigned within the 180-day period. If the franchisee or their estate fails to appoint an interim manager within this initial 15-day window, Southern Steer has the right to appoint one themselves. This ensures the continued operation of the Southern Steer business during the transition period.
This clause protects Southern Steer by ensuring the business continues to operate under approved management and is transferred in a timely manner, maintaining brand standards and minimizing disruption. For a prospective franchisee, this highlights the importance of succession planning and having a designated beneficiary or plan in place to manage the business in case of unforeseen circumstances like permanent disability. It also underscores the need to understand the conditions for transferring the franchise and the implications of failing to meet those conditions.