What is the nature of the Initial Franchise Fee for a Southern Steer franchise, and under what circumstances is it refundable?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.1. PAYMENTS DUE AT TIME OF SIGNING FRANCHISE AGREEMENT. In consideration of the Southern Steer Business granted herein, the Franchisee must pay to Franchisor an initial franchise fee ("Initial Franchise Fee") set out in Attachment A for the right to operate one Southern Steer Business in the Protected Area. The Franchisee acknowledges and agrees that the Initial Franchise Fee is fully earned by Franchisor upon Franchisee's execution of this Agreement and is non-refundable under any circumstances.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, the initial franchise fee is paid by the franchisee to the franchisor for the right to operate a Southern Steer business within a protected area. The specific amount of this fee is detailed in Attachment A of the franchise agreement.
The FDD explicitly states that the initial franchise fee is fully earned by Southern Steer upon the franchisee's execution of the franchise agreement. This means that once the agreement is signed, Southern Steer considers the fee as compensation for granting the franchise rights and providing initial setup assistance.
Importantly, the 2025 FDD stipulates that the initial franchise fee is non-refundable under any circumstances. This is a critical point for prospective franchisees to understand, as it means that regardless of whether the business becomes operational, or if the franchisee later decides not to proceed, the initial fee will not be returned. This policy is not uncommon in the franchise industry, as the fee is intended to cover the franchisor's initial costs in evaluating and setting up the new franchise location.