Does Southern Steer have the right to determine how Brand Fund contributions are spent?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor has the absolute and unilateral right to determine when, how and where the Brand Fund Contributions and other payments deposited into the Brand Fund will be spent.
This includes (a) the production and placement of media advertising, media relations, creating and testing direct response literature, social media, direct mailings, brochures, collateral material, advertising and public relations expenditures; (b) salaries and administrative costs, insurance, overhead, travel expenses, agency costs and commissions and similar and other expenses incurred by the Brand Fund related to its activities; (c) collection costs and legal expenses related to the Brand Fund's activities; (d) development, modification and management of mobile apps, software, technology solutions and related integration tools and website development, modifications and management (including intranet websites); (e) surveys, market and customer research, product and supplier testing, demographic research, guest satisfaction programs and services, independent shopping, secret shopper and service evaluations; (f) Brand Conferences, Periodic Seminars and Conferences; (g) in store advertising and menu boards and signage; and (h) telemarketing, sponsorships, loyalty programs, gift card programs and incentive programs.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, Southern Steer has the authority to decide how Brand Fund contributions are spent. The FDD states that Southern Steer has the "absolute and unilateral right" to determine when, how, and where the Brand Fund contributions are used. This includes various expenditures related to advertising, marketing, administrative costs, technology, research, and training.
Southern Steer details the broad scope of potential uses for the Brand Fund, including media advertising, public relations, social media, direct mail, brochures, salaries, administrative costs, insurance, travel expenses, agency costs, collection costs, legal expenses, mobile app development, website management, market research, customer satisfaction programs, brand conferences, in-store advertising, telemarketing, sponsorships, loyalty programs, and gift card programs. This gives Southern Steer significant discretion in allocating the Brand Fund.
The Brand Fund may also borrow or invest money, and any remaining amounts at the end of the year will accrue and may be applied toward the next year's expenses. Southern Steer will administer the Brand Fund and provide an annual unaudited financial statement upon written request, indicating how the funds were spent during the previous year. However, Southern Steer does not provide audited financial statements.
Southern Steer can also use the Brand Fund to cover its own administrative and overhead costs related to managing the fund and its programs. The Brand Fund can be terminated at any time at Southern Steer's sole discretion. If the Brand Fund is terminated, any remaining balance will be either expended as previously outlined or returned to franchisees on a pro-rata basis, as determined solely by Southern Steer.