Does the Southern Steer Multi-Unit Development Agreement terminate prior written agreements?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Termination of this Agreement as a result of the Multi-Unit Developer's failure to meet the Development Schedule will not affect the individual Franchise Agreements for the Southern Steer Businesses opened and operating in the Development Territory pursuant to this Agreement which were signed by the parties prior to termination of this Agreement; however, upon termination of this Agreement, all rights to open and operate additional Southern Steer Businesses in the Development Territory and all other rights granted to the Multi-Unit Developer under this Agreement will immediately revert to the Franchisor, without affecting those obligations of the Multi-Unit Developer that continue beyond the termination of this Agreement.
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, the termination of the Multi-Unit Development Agreement does not automatically terminate prior franchise agreements. Specifically, if the Multi-Unit Developer fails to meet the Development Schedule, the termination of the Multi-Unit Development Agreement will not affect the individual Franchise Agreements for Southern Steer Businesses that were opened and operating in the Development Territory before the termination, provided those agreements were signed prior to the termination. However, upon termination, all rights to open and operate additional Southern Steer Businesses in the Development Territory revert to Southern Steer.
This means that if a Multi-Unit Developer has already opened Southern Steer locations under individual franchise agreements and subsequently fails to meet the development schedule outlined in the Multi-Unit Development Agreement, those existing franchise agreements remain in effect. The franchisee can continue to operate those existing locations under the terms of their respective franchise agreements.
However, the Multi-Unit Developer loses the right to open any further Southern Steer locations within the designated territory. Southern Steer regains the right to develop additional locations themselves or contract with other franchisees to do so. This protects Southern Steer's interests in expanding its brand presence, even if the original Multi-Unit Developer is unable to fulfill their development obligations.
This clause provides clarity and protection for both Southern Steer and the Multi-Unit Developer. The franchisee retains their existing businesses, while Southern Steer maintains control over future development in the territory.