Is Southern Steer required to notify the franchisee if it transfers the Franchise Agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
21. FRANCHISEE'S OBLIGATIONS UPON TERMINATION OR EXPIRATION
21.1. Required Actions. After any termination, expiration, Transfer or cancellation of this Agreement for any reason whatsoever, Franchisee, its Owners, Operating Principal, Guarantor(s) agree:
- (a) Immediately cease operating the Southern Steer Business;
- (b) within five business days after termination, expiration, Transfer or cancellation of this Agreement pay all outstanding Fees to the Franchisor, its Affiliates and any Approved Suppliers and Designated Suppliers;
- (c) immediately return to the Franchisor the Brand Manual, menus, advertising materials and all other printed materials pertaining to the Southern Steer Business, Confidential Information, Trade Secrets, Marks and the System including but not limited to, letterhead, signs, stationery, training materials, forms and invoices and all copies thereof;
- (d) immediately notify all callers requesting information about Franchisee's former Southern Steer Business that such inquiries should be made to another phone number as specified by Franchisor;
- (e) immediately take such action as is necessary to remove all references to Franchisee's Southern Steer Business, System, Confidential Information, Trade Secrets, URLs that contain the Marks or any portion thereof or confusingly similar thereto or other Franchisor's or its Affiliates proprietary information from all telephone listings, listing agencies, websites, social media, email service providers, Internet, answering services, and any other organizations where Franchisee has used the above items;
(f) immediately cease all marketing or advertising which includes any of the Marks and cease using any and all items or materials which bear or include any of the Marks;
(g) immediately cancel all fictitious or assumed names or equivalent registrations relating to Franchisee's Southern Steer Business;
(h) within five business days of Franchisor's notice, execute additional documentation required by Franchisor to effectuate this Section 21.1;
(i) execute the release in a form specified by Franchisor within five business days of Franchisor providing such release to Franchisee;
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document does not explicitly state that Southern Steer is required to notify the franchisee if it transfers the Franchise Agreement. However, the document does outline the conditions under which a franchisee can transfer their ownership interest, Southern Steer's right of first refusal, and the obligations of the franchisee upon termination, transfer, or expiration of the agreement.
Specifically, the franchisee must obtain prior written approval from Southern Steer to transfer any ownership interest. Southern Steer will not withhold consent if the transfer complies with the agreement's terms and Southern Steer does not exercise its right of first refusal. The franchisee is obligated to offer their ownership interests to Southern Steer in writing under the same terms offered to any other party, giving Southern Steer 30 days to accept the offer.
Upon any termination, expiration, transfer, or cancellation of the agreement, the franchisee must immediately cease operating the Southern Steer business, pay all outstanding fees, return all proprietary materials, and take steps to remove references to the Southern Steer business from listings and advertising. These stipulations ensure that Southern Steer maintains control over its brand and system, even during ownership changes.