Does Southern Steer prohibit franchisees from joining an association of franchisees?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
When two or more franchised Southern Steer Businesses, including the Franchisee's Southern Steer Business, are opened in a market area designated by the Franchisor, the Franchisor will have the right to require, in its sole discretion, that the Franchisee's Southern Steer Business (and the other Southern Steer Businesses in the market area) participate in a local advertising cooperative ("Local Advertising Cooperative) which will conduct and administer media advertising, promotion, marketing and public relations ("Production and Marketing") for the benefit of the Southern Steer Businesses located in the market area.
At such time as the Franchisor requires that the Franchisee participate in a Local Advertising Cooperative for the Southern Steer Businesses in its market area, the Local Advertising Cooperative will be subject to the following terms and conditions:
- (a) Member.
The Local Advertising Cooperative will consist of all franchisee owned Southern Steer Businesses in the market area.
Each Southern Steer Business in the market area will be a "Member" of the Local Advertising Cooperative.
Each Member will have one vote for each Southern Steer Business that such Member owns and operates in the market area on all matters to be voted upon at duly convened meetings.
- (b) Meetings.
Each Member will be given five business days written notice of any proposed meeting.
A quorum consisting of a majority of all Members of the Local Advertising Cooperative will be required to convene any meeting of the Local Advertising Cooperative.
A majority vote by the Members present at a duly convened meeting will be required to pass any proposed resolutions or motions.
All meetings will be conducted according to Robert's Rules of Order.
- (c) Purpose.
The purpose of the Local Advertising Cooperative will be to conduct Production and Marketing for the benefit of all Southern Steer Businesses located in the market area.
- (d) Approval of Production and Marketing Programs.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
Based on the 2025 Southern Steer Franchise Disclosure Document, there is no explicit mention of franchisees being prohibited from forming or joining a franchisee association. However, the document does state that when two or more franchised Southern Steer Businesses are opened in a market area designated by the Franchisor, the Franchisor has the right to require participation in a local advertising cooperative.
The Local Advertising Cooperative consists of all franchisee-owned Southern Steer Businesses in the market area, with each member having one vote for each Southern Steer Business they own and operate. The purpose of this cooperative is to conduct production and marketing activities for the benefit of all Southern Steer Businesses in the designated market area.
While the FDD outlines the structure and purpose of the Local Advertising Cooperative, it does not address whether franchisees are allowed to form or participate in any other type of association. A prospective franchisee should seek clarification from Southern Steer regarding their policy on franchisee associations beyond the mandated advertising cooperative.