Does the Southern Steer MUDA outline any obligations of the franchisee upon termination of the agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
| i. | Your | 8.4 and 8.7 | Your rights under MUDA revert to Us and You | | | | obligations | | | | | | on | | | | | | termination/non-renewal | | must continue to operate the Southern Steer | | | | | Business You opened before termination of the | | | | | MUDA. We also reserve the right to purchase | | | | | Your opened Southern Steer Business from | | | | | You. |
Source: Item 17 — ITEM. 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–50)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, the Multi-Unit Development Agreement (MUDA) does outline certain obligations of the franchisee upon termination or non-renewal. Specifically, the franchisee's rights under the MUDA revert to Southern Steer, and the franchisee must continue to operate any Southern Steer Business they opened before the termination of the MUDA.
This means that even if the MUDA is terminated, the franchisee is still obligated to continue running any existing Southern Steer locations. This could be a significant obligation, as the franchisee may no longer have the support or benefits of the MUDA, but must still adhere to the franchise agreement for those individual locations.
Additionally, Southern Steer reserves the right to purchase the franchisee's opened Southern Steer Business. This gives Southern Steer the option to buy back the locations, potentially providing the franchisee with an exit strategy but also removing their ownership of the business. Prospective franchisees should carefully consider these obligations and rights upon termination, as they could significantly impact their future business operations and financial outcomes.