What is the purpose of Southern Steer reviewing the lease for the Franchised Location?
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.
The Franchisee will provide executed copies of the Lease or purchase closing documents for the Franchised Location within 10 days after their execution.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, Southern Steer may review the proposed lease for a franchisee's selected site. This review is conducted to ensure that the lease terms comply with the franchise agreement's terms and conditions. However, Southern Steer's review does not constitute business, economic, legal, or real estate advice.
It is important to note that the franchisee remains solely responsible for all aspects of the lease, including its enforceability, economic viability, and legality. The enforceability of the lease must be contingent upon Southern Steer approving the franchisee and the franchise agreement itself. The franchisee cannot sign the lease until the franchise agreement is signed by both parties and the lease contains the terms required by the franchise agreement, including those in the Lease Addendum.
Furthermore, the lease terms must grant Southern Steer the right to inspect the premises during regular business hours. The franchisee must also execute a Collateral Assignment of Lease, which allows Southern Steer to assume the franchisee's rights to the lease if the franchise agreement terminates, expires, or if the franchisee defaults on the lease. The franchisee must provide copies of the executed lease or purchase closing documents to Southern Steer within 10 days of execution.