What happens to the profits generated by the Southern Steer business during the period an interim manager is operating it?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event that Franchisor appoints an interim manager, during the time period such interim manager operates the Franchisee's Southern Steer Business, all revenue from the operation of Franchisee's Southern Steer Business will be kept in a separate account and the expenses of Franchisee's Southern Steer Business, including reasonable compensation and expenses of Franchisor and its agents will be charged to the account.
Additionally, Franchisor will retain 50% of Gross Revenues for Franchisee's Southern Steer Business' as a management fee.
Nothing contained herein will be construed to require Franchisor to operate Franchisee's Southern Steer Business in the case of Franchisee's inability to operate same, and the rights set forth herein may be exercised in the sole and absolute discretion of Franchisor.
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 the franchisor appoints an interim manager to operate a franchisee's Southern Steer business, all revenue generated during that period will be kept in a separate account. The expenses of the business, including reasonable compensation and expenses for Southern Steer and its agents, will be charged to this account.
In addition to covering expenses, Southern Steer will retain 50% of the gross revenues as a management fee. This means that only the remaining revenue, after deducting expenses and the management fee, would potentially be available to the franchisee.
It's important to note that Southern Steer is not obligated to operate the franchisee's business through an interim manager. This decision is at the sole discretion of Southern Steer. This arrangement ensures that the Southern Steer business continues to operate and maintain brand standards, but it also significantly impacts the franchisee's potential earnings during the period of interim management.