Does the Southern Steer MUDA outline any specific requirements that a franchisee must meet to avoid termination?
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 the 2025 Southern Steer Franchise Disclosure Document, the Multi-Unit Development Agreement (MUDA) outlines specific causes for termination, distinguishing between curable and non-curable defaults. For curable defaults, Southern Steer can terminate the MUDA with a 30-day notice if the 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. This means a franchisee has a chance to correct these issues within the given timeframe to avoid termination. These curable defaults are detailed in Section 8.2 of the MUDA.
Non-curable defaults, detailed in Section 8.1 of the MUDA, allow Southern Steer to terminate the MUDA immediately upon notice. These include failing to meet the Development Schedule, ceasing development activities, failing to pay uncontested obligations, insolvency, or making an assignment for the benefit of creditors. Additionally, convictions or guilty pleas by the franchisee's Owners, Operating Principal, Executive Management, Guarantors or Controlled Entity for violating any law, or materially violating laws applicable to the Southern Steer Businesses, also constitute non-curable defaults. Breaching any provision of the MUDA or any Franchise Agreement, or if a check or EFT is dishonored, can also lead to immediate termination if not cured within a short period.
Further non-curable defaults include engaging in conduct that materially impairs the goodwill associated with the Southern Steer brand, selling unauthorized products or services under the brand's marks, termination of any Franchise Agreement between the franchisee and Southern Steer, or breaches of non-compete and confidentiality covenants. Two or more defaults in a Development Period, regardless of whether they are cured, or assigning the MUDA without complying with Section 7.2, also constitute grounds for immediate termination. These stipulations highlight the critical importance of adhering to the agreement's terms and maintaining legal and ethical business practices to avoid potential termination of the MUDA.
These terms are typical in franchise agreements, as franchisors need to protect their brand and ensure consistent standards across all locations. Prospective Southern Steer franchisees should carefully review these termination clauses with legal counsel to fully understand their obligations and the potential consequences of non-compliance. Understanding these requirements is crucial for maintaining a successful and long-term relationship with Southern Steer.