Is Southern Steer required to assist the franchisee in negotiating the terms of the lease?
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.
Franchisee will be required to execute a lease that complies with this Section within 90 days after the Effective Date.
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 is not required to assist franchisees in negotiating lease terms. While Southern Steer may offer assistance, it is explicitly stated that they are not obligated to do so.
The FDD states that the franchisee must provide Southern Steer with a copy of the proposed lease at least 30 days before signing. Southern Steer's review is limited to ensuring the lease complies with the franchise agreement, and does not constitute business, economic, legal, or real estate advice. The franchisee bears sole responsibility for all lease terms, including their enforceability, economics, and legality.
This means that prospective Southern Steer franchisees should not rely on Southern Steer for lease negotiation expertise. It is crucial for franchisees to conduct their own due diligence, seek independent legal and real estate advice, and fully understand the terms of their lease agreement. The lease's enforceability must be contingent on Southern Steer approving the franchisee and the franchise agreement itself. The franchisee also needs to ensure the lease gives Southern Steer the right to inspect the premises during business hours and includes a Collateral Assignment of Lease, assigning the franchisee's rights to Southern Steer upon termination or default.