If the Franchisee terminates the Southern Steer Franchise Agreement, is the Franchisee released from their obligations to the Franchisor?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
A termination of this Agreement by Franchisee or any action by Franchisee to convert its Southern Steer Business to another business in violation of this Agreement will be deemed to be a termination without cause and a breach hereof, by Franchisee and (a) such actions will not relieve Franchisee of, or release Franchisee from, any of its obligations under this Agreement; (b) Franchisee's obligations under this Agreement will remain in full force and effect; and (c) Franchisee will be obligated to fully perform all terms and conditions of this Agreement until such time as this Agreement expires or is terminated in accordance with the provisions of this Agreement and applicable law.
If this Agreement is terminated by the Franchisee or because of a default by the Franchisee, the Franchisee will not be released or discharged from its obligations, including payment of all Fees then due and other amounts which would have become due under this Agreement if the Franchisee had continued the operation of the Southern Steer Business for the full Initial Term of this Agreement.
- 21.1. Required Actions. After any termination, expiration, Transfer or cancellation of this Agreement for any reason whatsoever, Franchisee, its Owners, Operating Principal, Guarantor(s) agree:
- (a) Immediately cease operating the Southern Steer Business;
- (b) within five business days after termination, expiration, Transfer or cancellation of this Agreement pay all outstanding Fees to the Franchisor, its Affiliates and any Approved Suppliers and Designated Suppliers;
- (c) immediately return to the Franchisor the Brand Manual, menus, advertising materials and all other printed materials pertaining to the Southern Steer Business, Confidential Information, Trade Secrets, Marks and the System including but not limited to, letterhead, signs, stationery, training materials, forms and invoices and all copies thereof;
- (i) execute the release in a form specified by Franchisor within five business days of Franchisor providing such release to Franchisee;
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 terminates the Franchise Agreement, it is considered a termination without cause and a breach of the agreement. This action does not relieve the franchisee from any of their obligations under the agreement, and all obligations remain in full force and effect. The franchisee is obligated to perform all terms and conditions of the agreement until it expires or is terminated in accordance with the provisions of the agreement and applicable law.
Southern Steer outlines that if the agreement is terminated by the franchisee or due to a default by the franchisee, the franchisee will not be released or discharged from their obligations. This includes the payment of all fees then due and other amounts that would have become due if the franchisee had continued operating the Southern Steer business for the full initial term of the agreement. The franchisor retains the right to collect the present value of these amounts and to receive the benefit of its bargain with the franchisee, as well as to accelerate the balances of any promissory notes owed and to receive any other unpaid amounts owed to the franchisor or any of its affiliates.
Furthermore, upon termination or expiration of the Franchise Agreement, the franchisee must take several actions. These include immediately ceasing operation of the Southern Steer Business and paying all outstanding fees to Southern Steer, its affiliates, and any approved or designated suppliers within five business days after termination. The franchisee must also return the Brand Manual, menus, advertising materials, and all other printed materials pertaining to the Southern Steer Business, confidential information, trade secrets, marks, and the system. Additionally, the franchisee must execute the release in a form specified by Southern Steer within five business days of Southern Steer providing such release to the franchisee and comply with all other applicable provisions of the agreement, including post-term obligations that survive the termination.