When does the Multi-Unit Developer have to execute the Initial Franchise Agreement for their first Southern Steer Business?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
inesses under the terms of this Agreement.
Initial Franchise Fees and Corresponding Franchise Agreements.
- (a) First Southern Steer Business. Upon executing this Agreement, the Multi-Unit Developer must execute the Initial Franchise Agreement for its first Southern Steer Business that the Multi-Unit Developer is required to open and operate under this Agreement ("First Southern Steer Business").
Source: Item 5 — and 7 of the FDD, Section 3.1 of the Franchise Agreement and Section 4.1 of the Multi-Unit Development Agreement are hereby amended to state that payment of the initial franchise fee and development fee will be deferred until We have satisfied Our pre-opening obligations, and You have commenced business operations. (FDD pages 168–290)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, a Multi-Unit Developer must execute the Initial Franchise Agreement for their first Southern Steer Business upon executing the Multi-Unit Development Agreement. This Initial Franchise Agreement pertains to the first Southern Steer Business that the Multi-Unit Developer is obligated to open and operate under the Development Agreement. The portion of the Development Fee paid will be applied as the Initial Franchise Fee, with no additional Initial Franchise Fee due at the time of execution.
This requirement ensures that the Multi-Unit Developer is committed to opening and operating the first Southern Steer Business as part of their development obligations. By executing the Initial Franchise Agreement upfront, both Southern Steer and the developer establish a clear understanding of the terms and conditions governing the first franchised location. This also allows Southern Steer to apply the relevant portion of the development fee towards the initial franchise fee, streamlining the payment process.
It is important to note that the Franchise Agreements for subsequent Southern Steer Businesses opened under the Development Agreement may differ from the Initial Franchise Agreement. The Multi-Unit Developer or a Controlled Entity must sign Southern Steer's then-current Franchise Agreements for each additional location. The Multi-Unit Developer should carefully review the terms of each Franchise Agreement as they may be subject to modifications and additional fees.