Is a Southern Steer Multi-Unit Developer permitted to transfer the Multi-Unit Development Agreement to an entity involved in a Competitive Business?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- Transfer to Competitor Prohibited.
The Multi-Unit Developer and the Owners will not transfer this Agreement or their Ownership Interests in the Multi-Unit Developer to any person or Entity that owns, operates, franchises, develops, consults with, manages, is involved in, or controls any Competitive Business or engages in any Competitive Activity.
**8.
TERMINATION RIGHTS OF THE FRANCHISOR**
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 the 2025 Southern Steer Franchise Disclosure Document, a Multi-Unit Developer is prohibited from transferring the Multi-Unit Development Agreement to any entity involved in a Competitive Business. The FDD states that neither the Multi-Unit Developer nor the Owners can transfer the agreement or their ownership interests to any person or entity that owns, operates, franchises, develops, consults with, manages, is involved in, or controls any Competitive Business or engages in any Competitive Activity. This restriction is in place to protect the Southern Steer system, marks, reputation, and image, as well as to safeguard the interests of the franchisor, the Multi-Unit Developer, and other franchisees.
This restriction on transfers is further reinforced by the requirement that any permitted transfer is not effective until Southern Steer receives a fully executed copy of all assignment documents and provides written consent to the assignment. Any attempted assignment that does not comply with these requirements will be considered void. This ensures that Southern Steer maintains control over who becomes a Multi-Unit Developer and prevents the brand from being associated with competing businesses.
For a prospective Southern Steer Multi-Unit Developer, this means that they cannot sell or transfer their development agreement to a competitor. This restriction remains in place to protect the brand and the existing network of franchisees. If a Multi-Unit Developer wishes to sell their business, they must first offer it to Southern Steer, and even if Southern Steer declines, the potential buyer cannot be involved in a competitive business. This clause is a significant consideration for anyone looking to invest in a Southern Steer Multi-Unit Development Agreement, as it limits the pool of potential buyers if they decide to exit the business.