Can Southern Steer require a franchisee to resell items that are not uniquely identified with Southern Steer?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
fusingly similar to the Marks.
- (f) "System" will mean the distinctive and proprietary system, methods, and processes for operating a Southern Steer Business featuring a full service butcher shop and grocery specializing in marinated meats, specialty cuts, homemade prepared foods, specialty marinades, fine cheeses, wine and beer (where permitted) and food preparation classes/takeout food assembly packages for consumers which are associated with the Marks, copyrights, distinctive interior and exterior building designs, décor, furnishings, menus, uniforms, signs, color combinations, uniformity requirements, standards of consistency and quality, procedures, cleanliness, sanitation, controls, specifications, training, marketing, advertising and instructions, Brand Manual, Confidential Information, and Trade Secrets promulgated by the Franchisor.
- (g) "Trade Secrets" means information, including systems, patterns, compilations, programs, methods, techniques or processes that both derive independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
2. Non-Disclosure of Confidential Information.
- (a) Associate acknowledges that Associate will receive from the Franchisee Confidential Information and Trade Secrets pertaining to the operation of the Southern Steer Business.
- (b) Associate acknowledges that the Confidential Information and Trade Secrets developed and utilized in connection with the operation of the Southern Steer Business are unique and the exclusive property of the Franchisor or its Affiliates, and that any unauthorized disclosure or use of the Confidential Information and Trade Secrets would be wrongful and would cause irreparable injury and harm to the Franchisor or its affiliates. Associate further acknowledges that the Franchisor or its affiliates has expended a great amount of effort and money in obtaining and developing the Confidential Information and Trade Secrets, that the Franchisor or its Affiliates have taken numerous precautions to guard the secrecy of the Confidential Information and Trade Secrets and that it would be very costly for competitors to acquire or duplicate the Confidential Information and Trade Secrets.
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)
Based on the 2025 Southern Steer Franchise Disclosure Document, the definition of the 'System' is relevant to whether franchisees can be required to resell items not uniquely identified with Southern Steer. The 'System' includes the methods and processes for operating a Southern Steer Business, featuring a full-service butcher shop and grocery specializing in specific products. These products include marinated meats, specialty cuts, homemade prepared foods, specialty marinades, fine cheeses, wine and beer (where permitted), and food preparation classes/takeout food assembly packages for consumers. The System is associated with the Southern Steer brand's trademarks, copyrights, distinctive designs, menus, uniforms, and standards.
This definition implies that the Southern Steer franchise system is built around a specific set of products and services that are closely tied to the brand's identity. While the FDD excerpts do not explicitly state that franchisees are required to sell only items uniquely identified with Southern Steer, the emphasis on the 'System' and its components suggests that franchisees are expected to adhere to the established product offerings and standards. The FDD also defines 'Competitive Activity' as offering products and services that are the same as, similar to, or competitive with a Southern Steer Business, which further reinforces the importance of maintaining a consistent brand identity and product line.
Given the comprehensive definition of the 'System' and the restrictions on 'Competitive Activity', it is likely that Southern Steer franchisees are expected to primarily sell products and services that align with the brand's established offerings. However, the FDD excerpts do not provide a definitive answer on whether franchisees can be required to sell items not uniquely identified with Southern Steer. A prospective franchisee should seek clarification from Southern Steer regarding the specific requirements and restrictions on product offerings to fully understand the scope of permissible sales activities.