Can Southern Steer refuse to renew a franchise on terms not generally available to other franchisees of the same class?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
nchisor written notice of Franchisee's election to do so at least 180 days and no more than one year prior to the expiration of the Initial Term (or immediately preceding Successor Term, as the case may be). As a condition for any Successor Term, the Franchisee must cause all of the following to occur:
- i. The Franchisee must provide written evidence to the Franchisor that the Franchisee either owns or has the right to lease the Franchised Location for at least five additional years after the end of the Initial Term or preceding Successor Term, as the case may be;
- ii. The Franchisee must sign Franchisor's then-current form of franchise agreement ("Successor Franchise Agreement"), which may include terms and conditions materially different from those in this Agreement, such as different performance standards, fee structures and/or increased fees, and an option to operate the Southern Steer Business for any additional terms;
- iii. In lieu of paying the Initial Franchise Fee specified in the Successor Franchise Agreement, the Franchisee must pay to Franchisor the Successor Franchise Fee set out in Section 3.2(j) at least 90 days before renewing Franchisee's right to operate the Southern Steer Business;
- iv. The Franchisee must execute a general release in a form satisfactory to Franchisor of any and all claims against Franchisor, its parent, subsidiaries or Affiliates (if applicable) and their officers, directors, attorneys, Owners and employees;
- v. The Franchisee (or its Operating Principal) and its Designated Manager must complete any new training requirements designated by the Franchisor;
- vi. The Franchisee must agree in writing to make, within six months after the effective date of the Successor Franchise Agreement, all capital expenditures necessary to remodel the Franchised Location, as determined by the Franchisor, to comply with the then-current Southern Steer Businessimage, décor, and specifications established by the Franchisor, and provide evidence to the Franchisor's reasonable satisfaction that the Franchisee has received a written loan commitment from a commercial lender for the amount of the estimated cost of the remodeling or has the financial capability of making such expenditures;
- vii. The Franchisee, Owners, Guarantor(s) and Designated Manager must be in compliance with Franchisor's then current qualifications and standards; and
- viii.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, Southern Steer can impose materially different terms and conditions when a franchisee seeks to renew their franchise agreement. Specifically, to renew the franchise, the franchisee must adhere to several conditions.
These conditions include providing written evidence that they own or have the right to lease the franchised location for at least five additional years after the current term. They must also sign Southern Steer's then-current form of franchise agreement, which may contain terms and conditions that are materially different from the original agreement. These differences can include altered performance standards, fee structures, and increased fees.
Furthermore, instead of paying the initial franchise fee specified in the successor franchise agreement, the franchisee must pay the successor franchise fee outlined in Section 3.2(j) at least 90 days before renewing their right to operate the Southern Steer business. The franchisee must also execute a general release of claims against Southern Steer and complete any new training requirements. They must also agree to make necessary capital expenditures to remodel the franchised location to comply with Southern Steer's current image and provide evidence of a loan commitment or financial capability to cover these costs. Finally, the franchisee, owners, guarantor(s), and designated manager must comply with Southern Steer's current qualifications and standards and maintain all required licenses, insurance, registrations, and approvals.