Is Southern Steer obligated to ensure that Brand Fund expenditures are proportionate to contributions from franchisees in a specific geographic area?

According to Southern Steer's 2025 Franchise Disclosure Document, Southern Steer does not guarantee that advertising expenditures from the Brand Fund will directly benefit franchisees or be proportionate to their contributions. The FDD states that Southern Steer has no obligation to ensure that Brand Fund expenditures in any geographic area are proportionate or equivalent to the contributions of franchisees operating in that area. Additionally, Southern Steer does not guarantee that any franchisee will benefit directly or in proportion to their contribution to the Brand Fund from the development of advertising and marketing materials or the placement of advertising. This means that while franchisees contribute to the Brand Fund, there is no assurance that the funds will be spent in their specific area or that they will see a direct return on their investment.

This policy is important for prospective franchisees to understand, as it means that their contributions to the Brand Fund may be used to support advertising and marketing efforts in other regions or for national campaigns that may not directly benefit their local Southern Steer Business. While the Brand Fund aims to promote the overall brand, franchisees should be aware that the benefits they receive may not be directly correlated to the amount they contribute. This is a common practice in franchising, where brand-building efforts are often prioritized over localized marketing initiatives.

Southern Steer reserves the right to allocate Brand Fund resources as it sees fit, which provides the company with flexibility in its marketing strategies. However, this also means that franchisees have limited control over how their contributions are spent and may need to supplement these efforts with their own local advertising initiatives. Franchisees are required to spend 1% of gross revenue on local advertising. Understanding this dynamic is crucial for franchisees to effectively manage their marketing budgets and expectations.