Does Southern Steer have the right to negotiate different terms with other Multi-Unit Developers without incurring liability to the current Multi-Unit Developer?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
ness will be the obligation of the Controlled Entity, and not the Multi-Unit Developer.
- Modifications to Franchise Agreement. The Multi-Unit Developer acknowledges that (a) the terms, conditions and economics of the Franchise Agreement may be modified from time to time by the Franchisor, (b) any changes or modifications made to the Franchise Agreement in the future will not be applicable to any Franchise Agreement previously executed by the Multi-Unit Developer, and (c) the Multi-Unit Developer will be required to pay any additional Fees contained in any Franchise Agreement signed by the Multi-Unit Developer after the date of this Agreement.
- Conditions. The Multi-Unit Developer hereby undertakes the obligation to develop and open franchised Southern Steer Businesses using the System in the Development Territory in strict compliance with the terms and conditions of this Agreement for the Term of this Agreement. The rights and privileges granted to the Multi-Unit Developer by the Franchisor under this Agreement are applicable only in the Development Territory, are personal in nature, and may not be used elsewhere or in any other area by the Multi-Unit Developer.
- Proprietary Marks and Confidential Information. Notwithstanding any provision to the contrary under this Agreement, the Multi-Unit Developer understands and agrees that this Agreement does not grant the Multi-Unit Developer any right to use the Marks or to use any of the Franchisor's Confidential Information and Trade Secrets. Rights to the Marks, Confidential Information and Trade Secrets are granted only under the Franchise Agreements to be executed by the Franchisor and the Multi-Unit Developer.
- Timing Involving Leases for Proposed Sites.
Source: Item 5 — and 7 of the FDD, Section 3.1 of the Franchise Agreement and Section 4.1 of the Multi-Unit Development Agreement are hereby amended to state that payment of the initial franchise fee and development fee will be deferred until We have satisfied Our pre-opening obligations, and You have commenced business operations. (FDD pages 168–290)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, Southern Steer has the right to offer different terms in its Franchise Agreements to different franchisees. The Multi-Unit Developer acknowledges that the terms, conditions, and economics of the Franchise Agreement may be modified from time to time by Southern Steer. Any changes or modifications made to the Franchise Agreement in the future will not be applicable to any Franchise Agreement previously executed by the Multi-Unit Developer. The Multi-Unit Developer will be required to pay any additional Fees contained in any Franchise Agreement signed after the date of their current agreement. This indicates that Southern Steer can modify agreements for future franchisees without impacting previously agreed-upon terms with existing Multi-Unit Developers.
Southern Steer retains significant rights regarding the use of its system and marks, even within a Development Territory granted to a Multi-Unit Developer. Southern Steer has the absolute right, subject to the terms and conditions of the Franchise Agreements regarding the Protected Area, to use and license the use of the System for the operation of Southern Steer Businesses inside or outside the Development Area, regardless of proximity to the Development Area. Southern Steer can also offer and sell products and services under other names and marks through alternative channels of distribution anywhere, and offer and sell products and services for Other Businesses and market Other Businesses to anyone, including prospective and existing franchisees anywhere within or outside of the Development Territory. These rights allow Southern Steer to adapt its franchise offerings and business strategies as needed without being restricted by existing agreements, provided they adhere to the Protected Area terms within those agreements.
However, there are conditions under which a Multi-Unit Developer's rights are protected. So long as the Franchisee is not in default of the Multi-Unit Development Agreement, the Franchise Agreement for the Multi-Unit Developer's first Southern Steer Business, or any other agreement between the Multi-Unit Developer and Southern Steer, Southern Steer will not operate or license a third party to operate a Southern Steer Business in the Development Territory for the First Period set out in the Development Schedule. Upon expiration of the First Period, Southern Steer has the right to operate and license third parties to operate Southern Steer Businesses in the Development Territory. This clause provides a limited period of exclusivity, but it is contingent on the Multi-Unit Developer remaining in compliance with all agreements.
In summary, Southern Steer retains the flexibility to negotiate different terms with future Multi-Unit Developers. However, Southern Steer must adhere to the terms of existing agreements, particularly regarding the Protected Area and the initial exclusivity period, as long as the Multi-Unit Developer remains in good standing. A prospective franchisee should carefully review the Development Schedule and the terms regarding the Protected Area to understand the scope and duration of any exclusivity granted.