Can Southern Steer reduce the scope of the restrictive covenant without the Franchisee's consent?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition, Franchisor reserves the right to reduce the scope of said provision without Franchisee, the Owners or the Recipients consent, at any time or times, effective immediately upon notice to Franchisee and the Owners.
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, Southern Steer retains the right to modify the restrictive covenant's scope without needing the franchisee's approval. This means Southern Steer can, at any time, lessen the restrictions placed on franchisees, owners, or recipients regarding competitive activities.
This provision benefits franchisees because Southern Steer can reduce the restrictions, potentially allowing franchisees more flexibility in their business activities. Southern Steer can make these changes effective immediately upon notifying the franchisee and owners.
This clause ensures Southern Steer can adapt the non-compete agreement as market conditions change, without being held back by needing individual franchisee consent. However, franchisees should be aware that while Southern Steer can reduce the scope of the non-compete, it cannot expand it without their consent.