What right must the lease grant to Southern Steer regarding the Franchised Location's premises?

According to the 2025 Southern Steer Franchise Disclosure Document, the lease for the Franchised Location must grant Southern Steer the right to enter the premises to conduct inspections during regular business hours. Additionally, the franchisee must agree to a Collateral Assignment of Lease, which allows the franchisee to assign their rights in the lease to Southern Steer in the event of a termination or expiration of the franchise agreement or a default under the lease. The franchisee must provide Southern Steer with a copy of the proposed lease at least 30 days before signing. Southern Steer may assist in negotiating the lease terms, but is not required to do so.

This requirement ensures that Southern Steer can oversee operations and protect its interests in the event of franchisee default or termination. The franchisee is responsible for ensuring the lease contains these terms and conditions, as well as those outlined in the Form of Lease Addendum. The enforceability of the lease must be conditional on Southern Steer approving the franchisee and the franchise agreement. The franchisee must also provide executed copies of the lease or purchase closing documents within 10 days after their execution.

These lease requirements are typical in franchising, as they allow the franchisor to maintain control over the location and protect their brand. Prospective franchisees should carefully review the lease agreement and ensure they understand all of the terms and conditions, including the assignment provisions and Southern Steer's inspection rights. Franchisees are required to execute a lease that complies with these requirements within 90 days after the Effective Date.