What is the purpose of Southern Steer's review of the lease?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchisee will provide the Franchisor with a copy of the proposed Lease for the site of the Franchised Location selected by the Franchisee at least 30 days before the date the Lease is to be signed.
The Franchisor may, but is not required, to assist the Franchisee in negotiating the terms of the Lease.
The Franchisor's review of the Lease will be only to determine whether the terms of the Lease comply with the terms and conditions of this Agreement, and not to provide any business, economic, legal or real estate advice or analysis.
The Franchisee will be solely responsible for all terms of the Lease, including the enforceability, economics and legality of all provisions in the Lease.
The enforceability of the Lease must be conditioned on Franchisor approving the Franchisee as a Southern Steer Franchisee and the enforceability of this Agreement.
The Franchisee will not sign the Lease until (a) this Agreement has been signed by both the Franchisee and the Franchisor; and (b) the Lease contains the terms required under this Section and the terms set forth in the Form of Lease Addendum attached to this Agreement as Attachment F.
The Franchisee will use its best efforts to negotiate and secure from the lessor of the Franchised Location the terms and conditions set forth herein and in the Form of Lease Addendum attached hereto.
In addition, the terms of the Lease must also give the Franchisor the right to enter the premises of the Franchised Location to conduct inspections during regular business hours.
Further, the Franchisee must execute a Collateral Assignment of Lease attached to this Agreement as Attachment F-1, whereby the Franchisee agrees to assign the Franchisee's rights in the Lease to the Franchisor in the event of a termination or expiration of the term of this Agreement or a default under the Lease.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, if a franchisee provides a proposed lease for their selected site, Southern Steer may review it. However, the purpose of Southern Steer's review is strictly limited to determining whether the lease terms comply with the franchise agreement's terms and conditions.
Southern Steer explicitly states that this review does not constitute business, economic, legal, or real estate advice or analysis. The franchisee bears sole responsibility for all lease terms, including their enforceability, economics, and legality. The enforceability of the lease must hinge on Southern Steer approving the franchisee and the franchise agreement's enforceability.
Furthermore, the franchisee cannot sign the lease until both parties sign the franchise agreement, and the lease incorporates the terms outlined in the agreement and its attached Form of Lease Addendum. The franchisee must also secure terms in the lease that allow Southern Steer to conduct inspections during regular business hours. Additionally, the franchisee must execute a Collateral Assignment of Lease, assigning their rights to Southern Steer in case of termination, expiration, or default.
In summary, while Southern Steer offers a lease review, its purpose is narrowly defined to ensure compliance with the franchise agreement, and franchisees must not rely on it for comprehensive due diligence or professional advice regarding the lease's overall suitability.