Are the objective terms and conditions contained in the Franchisee's Offer subject to negotiation between the Southern Steer franchisee and franchisor?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
ood Faith Negotiations. Unless the Franchisor terminates its Notice of Intent to Purchase as provided in Section 19.2 the Franchisee and the Franchisor will act in good faith to agree on the terms and conditions of the definitive agreement or agreements for the purchase of the Southern Steer Business or Major Assets (other than those objective terms and conditions contained in the Franchisee's Offer) and the closing date for the sale of the Southern Steer Business or Major Assets to the Franchisor will take place within 120 days after the Notice Date.
- 19.4. Sale to Purchaser. The Franchisee will have the right to complete the transaction for the sale of the Southern Steer Business or Major Assets to a purchaser according to the terms and conditions contained in the Franchisee's Offer to the Franchisor if: (a) the Franchisor delivers a Waiver Notice to the Franchisee, (b) the Franchisor fails to deliver either a Waiver Notice or the Notice of Intent to Purchase to the Franchisee within 30 days after receiving the Franchisee's Offer, (c) the Franchisor terminates its Notice of Intent to Purchase during the due diligence period pursuant to the provisions of Section 19.2, or (d) the Franchisee and the Franchisor fail to agree on the terms and conditions for the definitive agreement or agreements for the purchase of the Southern Steer Business or Major Assets by the Franchisor from the Franchisee (other than those objective terms and conditions contained in the Franchisee's Offer) on or before the 120th day after the Notice Date.
- 19.5. Negotiated Changes with Purchaser.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, when a franchisee offers to sell their Southern Steer business, some terms are open to negotiation while others are not. Specifically, the objective terms and conditions included in the Franchisee's Offer are not subject to negotiation.
If the franchisor and franchisee cannot agree on the definitive purchase agreement terms (excluding the objective terms in the Franchisee's Offer) within 120 days after the notice date, the franchisee can proceed with selling to another purchaser. However, if the franchisee modifies any terms initially offered to Southern Steer during negotiations with a third-party purchaser, Southern Steer has the right of first refusal and the franchisee must re-offer the business to Southern Steer under the new terms. Failure to do so constitutes a breach of the agreement.
This clause ensures Southern Steer retains control over who joins their franchise system and maintains consistent terms. It also protects the franchisee by allowing them to sell to a third party if an agreement cannot be reached with Southern Steer within a specified timeframe. However, franchisees must be careful not to change the terms to circumvent Southern Steer's right of first refusal.