What is the length of the 'Successor Term' for a Southern Steer franchise?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
nce 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. The Franchisee must provide written evidence to the Franchisor that the Franchisee either owns or has the right to lease the Franchised Location for at least five additional years after the end of the Initial Term or preceding Successor Term, as the case may be;
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, a franchisee may have the right to operate their Southern Steer business for an additional term after the initial term expires. This additional term is called the 'Successor Term'.
To be eligible for a Successor Term, the franchisee must meet several conditions. These include timely compliance with all agreement terms, such as payments of royalty fees, brand fund contributions, and local advertising cooperative fees. The franchisee must also not be in default of their lease, have satisfied all monetary obligations to Southern Steer and its affiliates, and not be in default under the agreement too many times (no more than two times in any 12-month period or more than six times during the initial term). The franchisee must provide written notice to Southern Steer of their election to exercise the option for a Successor Term at least 180 days and no more than one year prior to the expiration of the Initial Term.
The FDD does not specify the length of the Successor Term. The franchisee must also sign Southern Steer's then-current form of franchise agreement, which may include materially different terms and conditions, such as different performance standards, fee structures, and/or increased fees, and an option to operate the Southern Steer Business for any additional terms. Prospective franchisees should inquire with the franchisor about the length of the Successor Term and any associated conditions or requirements.