If a Southern Steer franchisee breaches the MUDA, can the franchisor terminate the agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
enewal or extension of the | Not applicable | | | | term | | | | c. | Requirements for You to | Not applicable | | | | renew or extend | | | | d. | Termination by You | Not applicable | | | e. | Termination by franchisor | Not applicable | | | | without cause | | | | f. | Termination by franchisor | 8.1 | If you breach the MUDA. | | | with cause | | | | g. | "Cause" defined – curable defaults | 8.2 | We have the right (subject to state law) to terminate the MUDA upon 30-days' notice if You or Your Controlled Entity failed to comply with the standards and Brand Manual as described in any Franchise Agreement; You fail to obtain required approvals; or any other reason that constitutes good cause under applicable law. | | h. | "Cause" defined – non curable defaults | 8.1 | We have the right (subject to state law) to terminate the MUDA immediately upon receipt of notice if Multi-Unit Developer (You): fail to cure the default of your Development Schedule in the MUDA; cease to engage in development activities; fail to pay uncontested obligations or liabilities, are deemed insolvent; make an assignment for the benefit of creditors; or Your Owners, Operating Principal, Executive Management, Guarantors or Controlled Entity are convicted of, or plead guilty to or no contest to a charge of violating any law or materially violates any federal, state or municipal law, rule, code or regulation applicable to the operations of the Multi-Unit Developer's or Controlled Entity's Southern Steer Businesses, breaches any provision, term or condition of this Agreement or any Franchise Agreement or other agreement between Multi-Unit Developer or Controlled Entity and Franchisor or its Affiliates and fails to cure such default within the period | | | Provision | Section in | Summary | | | | | MUDA | | | |----|---------------------------------------------|--------------------|--------------------------------------------------------------------------------------------------------------|--| | | | | prescribed; any check or EFT issued by the | | | | | | Multi-Unit Developer or Controlled Entity is | | | | | | | | | | | | dishonored; are involved in any act or conduct | | | | | | which | | | | | | materially | | | | | | impairs | | | | | | the | | | | | | goodwill | | | | | | associated with "Southern Steer Butcher," any | | | | | | other of the Marks or with the System that is not | | | | | | cured | | | | | | within | | | | | | 24 | | | | | | hours; | | | | | | engages | | | | | | in | | | | | | any | | | | | | unauthorized business or practice or sells any | | | | | | unauthorized product or service under the | | | | | | Franchisor's Marks, any Franchise Agreement | | | | | | between You and Franchisor is terminated;
Source: Item 17 — ITEM. 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–50)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, the franchisor has the right to terminate the Multi-Unit Development Agreement (MUDA) if the franchisee breaches the agreement. Specifically, Section 8.1 of the MUDA allows Southern Steer to terminate the agreement if a franchisee fails to comply with the standards and Brand Manual as described in any Franchise Agreement, fails to obtain required approvals, or for any other reason that constitutes good cause under applicable law. In cases of curable defaults, Southern Steer must provide a 30-day notice before termination.
However, Southern Steer can terminate the MUDA immediately upon notice for non-curable defaults. These include failing to cure a default in the Development Schedule, ceasing development activities, failing to pay uncontested obligations, insolvency, or making an assignment for the benefit of creditors. Immediate termination can also occur if the franchisee's owners, operating principal, executive management, guarantors, or controlled entity are convicted of violating any law, materially violate laws applicable to the Southern Steer business, breach any agreement with Southern Steer, or issue a dishonored check or EFT.
Additionally, Southern Steer can immediately terminate the MUDA if the franchisee engages in unauthorized business practices, sells unauthorized products under Southern Steer's marks, has a Franchise Agreement terminated, breaches non-compete or confidentiality covenants, has multiple defaults in a Development Period, or assigns the MUDA without approval. These termination rights are subject to applicable state laws, which may modify the conditions or procedures for termination.