What is the length of the initial term for a Southern Steer franchise agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
2.1. Term. The initial term ("Initial Term") of this Agreement will commence on the Effective Date and will be for a period of 10 years, unless terminated sooner in accordance with this Agreement. The Initial Term may be extended under certain circumstances to coincide with the term of the lease for Franchisee's Southern Steer Business. This Agreement will not be enforceable until it has been signed by both the Franchisee and the Franchisor.
2.2. Successor Term. Provided that, at the end of the Initial Term of this Agreement or any Successor Term, as the case may be, (a) the Franchisee has timely complied with all terms and conditions of this Agreement, including the timely payment of all Royalty Fees, Brand Fund Contribution Fees, Local Advertising Cooperative Fees, and other Fees due to the Franchisor; (b) the Franchisee is not in default of the lease for the Franchised Location, if any; (c) the Franchisee has paid or satisfied all monetary obligations owed by the Franchisee to the Franchisor, Franchisor's Affiliates, Approved Suppliers, and Designated Suppliers; (d) the Franchisee is not in default under this Agreement at the time Franchisee provides written notice; and (e) the Franchisee has not been in default under this Agreement more than two times in any 12 month period or more than six times during the Initial Term (or the immediately preceding Successor Term, as the case may be) regardless of whether or not such default has been cured, the Franchisee may, at its option, have the right to operate the Southern Steer Business at the Franchised Location for an additional Successor Term commencing on the end of the Initial Term (or immediately preceding Successor Term, as the case may be). The Franchisee must exercise its option for a Successor Term by giving the Franchisor written notice of Franchisee's election to do so at least 180 days and no more than one year prior to the expiration of the Initial Term (or immediately preceding Successor Term, as the case may be). As a condition for any Successor Term, the Franchisee must cause all of the following to occur:
i.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, the initial term of the franchise agreement is 10 years, commencing on the effective date of the agreement. This initial term can be extended under certain circumstances to align with the lease term for the franchisee's Southern Steer business location. The franchise agreement becomes enforceable once it has been signed by both the franchisee and the franchisor.
At the end of the initial term, a franchisee may have the option to operate the Southern Steer business for an additional term if they have complied with all the terms and conditions of the agreement. This includes timely payments of all fees, not being in default of the lease, satisfying all monetary obligations, and not being in default under the agreement more than two times in any 12-month period or more than six times during the initial term.
To exercise the option for a successor term, the franchisee must provide written notice to Southern Steer at least 180 days and no more than one year before the expiration of the initial term. As a condition for any successor term, the franchisee must provide written evidence of owning or having the right to lease the franchised location for at least five additional years, sign Southern Steer's then-current form of franchise agreement, pay the successor franchise fee, execute a general release of claims, complete any new training requirements, agree to make necessary capital expenditures to remodel the franchised location, and comply with Southern Steer's current qualifications and standards.