Who is responsible for the terms of the lease for a Southern Steer franchise?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, the franchisee is solely responsible for all terms of the lease for their franchised location. This includes the enforceability, economics, and legality of all provisions within the lease agreement. While Southern Steer may offer assistance in negotiating the lease terms, they are not required to do so. Their review of the lease is limited to ensuring compliance with the franchise agreement, and does not constitute business, economic, legal, or real estate advice.
This means that the franchisee bears the ultimate responsibility for understanding and agreeing to the lease terms. It is crucial for prospective franchisees to carefully review the lease agreement and seek independent legal and business advice to ensure they fully understand their obligations and potential risks. The enforceability of the lease must be conditional on Southern Steer approving the franchisee and the franchise agreement itself.
Furthermore, the franchisee cannot sign the lease until both the franchise agreement is signed by both parties and the lease contains the terms required by the agreement, including those in the Form of Lease Addendum. The franchisee must also use their best efforts to negotiate and secure specific terms and conditions from the lessor, as outlined in the Lease Addendum. The lease terms must grant Southern Steer the right to inspect the premises during regular business hours.
Southern Steer also requires the franchisee to execute a Collateral Assignment of Lease, which allows Southern Steer to assume the franchisee's rights to the lease in the event of termination, expiration, or default. The franchisee must provide executed copies of the lease or purchase closing documents within 10 days of execution. Overall, while Southern Steer provides some guidelines and requires certain terms to be included, the franchisee is ultimately responsible for negotiating, understanding, and adhering to the lease agreement.