What obligations does a Southern Steer franchisee have (Item 9) regarding adherence to approved suppliers (Item 8)?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will purchase all products, services, supplies, equipment, materials and Foods, Beverages or Products required for the operation of Franchisee's Southern Steer Business from manufacturers, suppliers or distributors designated or previously approved by Franchisor.
Franchisee acknowledges and agrees that Franchisor or its Affiliates may be the sole designated supplier, manufacturer or distributor of certain required or non-required products, services, supplies, equipment, materials and Foods, Beverages or Products.
Franchisee agrees to purchase from Franchisor or its Affiliates directly those items specified by Franchisor from time to time.
- 7.7.
Franchisee Suppliers.
If Franchisee desires to use different foods, food items, products, supplies, equipment, materials, services or Food, Beverages and Products or desires to purchase foods, food items, products, supplies, equipment, materials, services or Food, Beverages and Products from other suppliers Franchisee must first obtain Franchisor's approval in writing.
Any suppliers proposed by Franchisee must conform to the Franchisor's standards and specifications and Franchisor must first determine that the supplier's business reputation, quality standards, delivery performance, credit rating, and other criteria meet Franchisee standards and specifications.
The Franchisor may deny or revoke the Franchisor's approval of any supplier at any time based upon the lack of any of the above items.
If the Franchisee desires to purchase any required foods, food items, products, supplies, equipment, materials, services or Food, Beverages and Products from other suppliers which are not Approved Suppliers, then the Franchisee must, at its expense, submit samples, specifications, and product information requested by the Franchisor, for review and testing to determine whether these foods, food items, products, supplies, equipment, materials, services or Food, Beverages and Products comply with the Franchisor's standards and specifications.
The Franchisor will also have the right to inspect the facilities of the proposed supplier, and the Franchisee will reimburse the Franchisor for the costs and expenses incurred to conduct the inspection.
The Franchisor will complete all testing and will notify the Franchisee of its determination within 30 days after the Franchisor completes its testing, inspection and evaluation process.
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, franchisees are obligated to purchase all products, services, supplies, equipment, materials, and food required for their Southern Steer Business from suppliers designated or previously approved by Southern Steer. Southern Steer may act as the sole designated supplier for certain items. Franchisees must buy specified items directly from Southern Steer or its affiliates.
If a franchisee wants to use different or new suppliers, they must get written approval from Southern Steer. The proposed suppliers must meet Southern Steer's standards for business reputation, quality, delivery, and credit rating. Southern Steer can deny or revoke approval at any time if a supplier fails to meet these standards. The franchisee bears the expense of submitting samples and information for review and testing. Southern Steer has the right to inspect the supplier's facilities, with the franchisee reimbursing the inspection costs. Southern Steer will notify the franchisee of its decision within 30 days after completing the evaluation process.
To maintain uniformity and quality, franchisees must adhere to Southern Steer's specifications, standards, and methods. They must purchase all goods, services, supplies, food products, furniture, signage, fixtures, equipment, software, POS systems, third-party delivery services, inventory, and supplies from approved vendors who consistently meet Southern Steer's standards. Southern Steer will provide written standards and specifications for the business premises layout, decor, and goods and services. Southern Steer may modify these standards, and franchisees must comply with any changes.
Southern Steer estimates that purchases made according to their standards and specifications will constitute up to 80% of a franchisee's initial expenditures and about 90% of their total purchases during operation. While Southern Steer does not currently receive payments from designated suppliers based on franchisee purchases, the Franchise Agreement does not prohibit them from doing so in the future. Prices charged to company-owned Southern Steer Businesses may be lower than those charged to franchised locations due to factors like volume or administrative costs.