Does the post-term covenant not to compete apply if the Southern Steer agreement is transferred or assigned?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Post Term Covenant Not to Compete.
For a period of 24 months after the later of (1) the termination, transfer, assignment or expiration of this Agreement; or (2) the entry of a final order by an arbitrator or a court of competent jurisdiction enforcing this covenant, Franchisee and those persons identified in Section 16.3 will not engage in any Competitive Activity within:
i. the Franchised Location;
ii. the Protected Area;
iii. within 50 miles of the outer boundaries of the Protected Area;
iv. within 50 miles from the Franchised Location;
v. within 50 miles of any other Southern Steer Business, or
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 post-term covenant not to compete does apply if the franchise agreement is transferred or assigned. Specifically, the non-compete lasts for 24 months after the termination, transfer, assignment, or expiration of the agreement. This restriction also begins after the entry of a final order by an arbitrator or court enforcing the covenant.
This means that if a franchisee sells their Southern Steer business to a new owner (a transfer or assignment), the original franchisee is still bound by the non-compete agreement for the specified period. This prevents the former franchisee from immediately opening a competing business nearby and potentially drawing customers away from the new owner's Southern Steer franchise.
The non-compete restricts the franchisee from engaging in any competitive activity within the franchised location, the protected area, within 50 miles of the outer boundaries of the protected area, within 50 miles from the franchised location, or within 50 miles of any other Southern Steer Business. This broad geographic scope is designed to protect Southern Steer's market and brand integrity after a transfer or assignment.