Where is the revenue from the operation of the Southern Steer business kept when an interim manager is appointed?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event that Franchisor appoints an interim manager, during the time period such interim manager operates the Franchisee's Southern Steer Business, all revenue from the operation of Franchisee's Southern Steer Business will be kept in a separate account and the expenses of Franchisee's Southern Steer Business, including reasonable compensation and expenses of Franchisor and its agents will be charged to the account.
Additionally, Franchisor will retain 50% of Gross Revenues for Franchisee's Southern Steer Business' as a management fee.
Nothing contained herein will be construed to require Franchisor to operate Franchisee's Southern Steer Business in the case of Franchisee's inability to operate same, and the rights set forth herein may be exercised in the sole and absolute discretion of Franchisor.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, if an interim manager is appointed to operate a franchisee's Southern Steer business, all revenue generated during that period will be kept in a separate account. This measure is intended to prevent any interruption of the business that could cause harm. An interim manager may be appointed if the franchisee, operating principal, or owners are unable or fail to operate the business for 45 days or longer, or 15 days or longer under specific conditions outlined in Section 18.2.
From this separate account, the expenses of the Southern Steer business will be paid. These expenses include reasonable compensation and expenses for Southern Steer and its agents. Additionally, Southern Steer will retain 50% of the gross revenues as a management fee for overseeing the business during the interim management period.
It's important to note that Southern Steer is not obligated to operate the franchisee's business during the period of inability, and the decision to appoint an interim manager is at Southern Steer's sole discretion. This arrangement ensures that the Southern Steer business can continue operating smoothly even when the franchisee is temporarily unable to manage it, while also compensating Southern Steer for its management services and covering the business's operational costs.