What is the Multi-Unit Developer's obligation regarding compliance with the terms and conditions of the Southern Steer Multi-Unit Development Agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
al Fees contained in any Franchise Agreement signed by the Multi-Unit Developer after the date of this Agreement.
- Conditions. The Multi-Unit Developer hereby undertakes the obligation to develop and open franchised Southern Steer Businesses using the System in the Development Territory in strict compliance with the terms and conditions of this Agreement for the Term of this Agreement. The rights and privileges granted to the Multi-Unit Developer by the Franchisor under this Agreement are applicable only in the Development Territory, are personal in nature, and may not be used elsewhere or in any other area by the Multi-Unit Developer.
- Proprietary Marks and Confidential Information. Notwithstanding any provision to the contrary under this Agreement, the Multi-Unit Developer understands and agrees that this Agreement does not grant the Multi-Unit Developer any right to use the Marks or to use any of the Franchisor's Confidential Information and Trade Secrets. Rights to the Marks, Confidential Information and Trade Secrets are granted only under the Franchise Agreements to be executed by the Franchisor and the Multi-Unit Developer.
- Timing Involving Leases for Proposed Sites. The Multi-Unit Developer will not purchase or lease the property for the proposed site for the Franchised Location of any Southern Steer Business until the Multi-Unit Developer has signed the corresponding Franchise Agreement with the Franchisor for such Southern Steer Business and has complied with the applicable provisions of the corresponding Franchise Agreement relating to the selection of the site for the Franchised Location.
7. ASSIGNMENT.
- Assignment and Transfer of Agreement by the Franchisor. This Agreement may be unilaterally Transferred and assigned by the Franchisor to a person or Entity without the approval of the Multi-Unit Developer and will inure to the benefit of the successors and assigns of the Franchisor. The Franchisor will provide the Multi-Unit Developer with written notice of any such Transfer, and the Transferee (as that term is defined below) will be required to fully perform all obligations of the Franchisor under this Agreement.
- Assignment by Multi-Unit Developer. The Multi-Unit Developer or, if Multi-Unit Developer is an Entity, then also the Owner(s) of Multi-Unit Developer, may not sell, transfer or assign its (or their) rights under this Agreement or any interest in it or any part of the Multi-Unit Developer Entity. The only exception to this prohibition is a transfer or assignment to an Entity that is an Approved Affiliate as defined below. An Approved Affiliate must be a wholly owned subsidiary of the Multi-Unit Developer or an Entity (A) controlled by Multi-Unit Developer or the individual Owners of Multi-Unit Developer as either the (i) general partner of a limited partnership, (ii) the managing member of a limited liability company; (iii) the majority shareholder a corporation; or (iv) a Controlled Entity; and (B) of which Multi-Unit Developer or the individual Owners of Multi-Unit Developer own at least 51% of all Ownership Interest, unless these requirements are waived by the Franchisor, in its sole discretion.
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, the Multi-Unit Developer has a continuing obligation to comply with the terms and conditions of the Multi-Unit Development Agreement. This obligation extends to the Owners of the Multi-Unit Developer entity as well. Failure to comply with the representations, warranties, and covenants within the agreement constitutes a material breach. The Multi-Unit Developer must also develop and open franchised Southern Steer Businesses using the System in the Development Territory in strict compliance with the terms and conditions of the agreement for the term of the agreement.
Specifically, the Multi-Unit Developer must adhere to the Development Schedule outlined in Attachment A, which is considered a material provision of the agreement. Compliance with the Development Schedule is determined by the number of Southern Steer Businesses that are actually open and continuously operating in the Development Territory. The Multi-Unit Developer is required to open and operate a minimum of three Southern Steer Businesses in the Development Territory. Time is of the essence with respect to compliance with the Development Schedule.
Furthermore, the Multi-Unit Developer must ensure that they or their Controlled Entity sign the then-current Franchise Agreements for each Southern Steer Business opened under the Multi-Unit Development Agreement. The Multi-Unit Developer will not purchase or lease property for a proposed site until the corresponding Franchise Agreement is signed and the applicable provisions related to site selection are followed. The Multi-Unit Developer also acknowledges that the terms and conditions of the Franchise Agreement may be modified by Southern Steer from time to time, but these changes will not apply to previously executed Franchise Agreements. The Multi-Unit Developer will be required to pay any additional fees contained in any Franchise Agreement signed after the date of the Multi-Unit Development Agreement.
In addition, the Multi-Unit Developer must maintain sufficient working capital to operate the Southern Steer Businesses and fulfill their development obligations. If there are changes in ownership, the Franchisor must be notified in writing within five days, and new owners must execute all required documents. The Multi-Unit Developer and Owners also represent, warrant, and covenant that they will comply with all requirements and will perform all obligations in accordance with the terms and conditions of the Multi-Unit Development Agreement.