What happens if a Southern Steer franchisee does not timely report Gross Revenues?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
urance maintained by You or for Your benefit. Excluded from the definition of Gross Revenues are sales, use or gross receipts taxes collected from customers and thereafter paid directly to the appropriate taxing authority and any bonafide refunds made to customers. If You have not timely reported Your Gross Revenues to Us for any reporting period, then We shall be authorized, at Our option, to debit Your account for the higher of: (a) the fees transferred from Your account (or otherwise paid to Us through other means) for the last reporting period for which a report of Your Gross Revenues was provided to Us, or (b) an estimated amount due. If you open your Southern Steer Business prior to your Required Opening Date, you will pay Royalty beginning the third month of opening your Southern Steer Business.
- (3). Brand Fund Contribution. We reserve the right to establish a Brand Fund. The purpose of the Brand Fund is to promote expansion and increase brand awareness and preference for the System (See Item 11).
Source: Item 6 — ITEM. 6 OTHER FEES (FDD pages 11–16)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, if a franchisee fails to report Gross Revenues on time, Southern Steer has the option to debit the franchisee's account. The amount debited will be the higher of two options. The first option is the amount of fees transferred from the franchisee's account (or otherwise paid) for the last reporting period in which Gross Revenues were actually reported. The second option is an estimated amount due, as determined by Southern Steer.
Gross Revenues for Southern Steer include sales from all products and services, whether for on-site or off-site consumption. This includes delivered products and wholesale sales. Gross Revenues also encompass proceeds from any business interruption insurance the franchisee maintains. However, sales, use, or gross receipts taxes collected from customers and then paid to the appropriate taxing authority, along with any legitimate refunds to customers, are excluded from Gross Revenues.
This policy incentivizes franchisees to report Gross Revenues accurately and on time. By reserving the right to debit an estimated amount or the previous period's fees, Southern Steer ensures it receives payment and discourages underreporting. Franchisees should maintain meticulous records of their Gross Revenues and report them promptly to avoid potential overestimation and associated financial strain. They should also clarify with Southern Steer how the 'estimated amount due' is calculated to understand the potential financial implications of late reporting.