For purposes of determining compliance with the Development Schedule, what Southern Steer businesses will be counted toward the number required to be open and continuously operating?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of determining compliance with the Development Schedule set forth in this Section 5.1, only the Multi-Unit Developer's Southern Steer Businesses actually open and continuously operating in the Development Territory as of a given date will be counted toward the number of Southern Steer Businesses required to be open and continuously operating. The Multi-Unit Developer will be required to open and operate a minimum of three Southern Steer Businesses in the Development Territory.
Source: Item 5 — and 7 of the FDD, Section 3.1 of the Franchise Agreement and Section 4.1 of the Multi-Unit Development Agreement are hereby amended to state that payment of the initial franchise fee and development fee will be deferred until We have satisfied Our pre-opening obligations, and You have commenced business operations. (FDD pages 168–290)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, when determining if a multi-unit developer is meeting their development schedule, only Southern Steer businesses that are actually open and continuously operating in the designated development territory as of a specific date will be counted towards the required number of open businesses. The multi-unit developer must open and operate a minimum of three Southern Steer businesses within their development territory.
This means that a multi-unit developer cannot count locations that are under construction, temporarily closed, or not yet generating revenue towards meeting their obligations. The focus is strictly on operational businesses contributing to the Southern Steer brand's presence and revenue within the agreed-upon territory.
The development schedule itself, outlining the specific timelines for opening these businesses, is a crucial part of the agreement. The FDD states that this schedule is included as Attachment A. Failure to comply with the development schedule can lead to termination of the agreement, although existing franchise agreements for already operating locations will remain in effect. However, the rights to open any further Southern Steer locations in the territory would revert back to the franchisor.
Prospective multi-unit developers should carefully review the development schedule and assess their ability to meet the required timelines for opening and operating the minimum number of Southern Steer locations. They should also consider factors such as site selection, construction timelines, and local market conditions to ensure they can maintain continuous operation of their businesses and avoid potential penalties or termination of the agreement.