Can prices charged to company-owned Southern Steer businesses differ from prices charged to franchised Southern Steer businesses by suppliers, and if so, what are some potential reasons for these differences?

According to Southern Steer's 2025 Franchise Disclosure Document, suppliers may charge company-owned or affiliated Southern Steer businesses different prices than they charge franchised locations. The FDD states that price differences can be based on factors such as volume, credits, administrative costs, or other considerations. This means that franchisees might not always receive the lowest possible price on goods and services compared to company-owned stores.

This discrepancy in pricing could impact a franchisee's profitability. If a company-owned store benefits from lower prices due to bulk purchasing power or other negotiated benefits, it could achieve higher profit margins than a franchised location, assuming all other factors are equal. This difference could affect a franchisee's ability to compete effectively in the market.

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. If Southern Steer were to receive rebates, discounts, or other payments from suppliers, they have the right to determine how those payments are used. This could potentially offset some of the higher costs faced by franchisees, but there is no guarantee that such benefits would be passed on directly to the franchisees.

Prospective franchisees should inquire about the specific purchasing arrangements Southern Steer has in place and how these arrangements might affect the prices they pay for required goods and services. Understanding the potential for price differences and the reasons behind them is crucial for assessing the overall financial viability of a Southern Steer franchise.