How is the royalty fee calculated for a Southern Steer franchise?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee(1) | Amount | Date Due | Remarks |
|---|---|---|---|
| Royalty | Beginning on the third | Wednesday each | The Royalty is based on Gross |
| month from Your | week for the | Revenues from the previous week | |
| Required Opening Date, 6% of annual Gross Revenues from $1.00 to $1,000,000; 5% from $1,000,001 to $2,000,000; and 4% from $2,000,001 and greater.(2). | preceding week. | for each individual Southern Steer Business You operate. Payments are made via electronic fund transfer ("EFT") or automatic withdrawal. We reserve the right to designate another day of the week for payment. The Gross Revenue calculation is re set each calendar year and is based on each individual Southern Steer Business You operate. |
Gross Revenues is defined in the Franchise Agreement as sales from all products and services sold from, thru, at or in connection with Your Southern Steer Business, whether cash, credit (regardless of collection), barter or otherwise, exclusive of applicable sales, use or service taxes.
Gross Revenues includes sales from all products and services sold for on-Site or off-Site consumption, including without limitation products and services delivered to customers and products and services sold wholesale, if any.
Gross Revenues includes sales from all products and services sold for on-Site or off-Site consumption, including without limitation products and services delivered to customers and products and services sold wholesale, if any.
The term "Gross Revenues" also includes the proceeds received or realized by You in connection with any business interruption insurance maintained by You or for Your benefit.
Excluded from the definition of Gross Revenues are sales, use or gross receipts taxes collected from customers and thereafter paid directly to the appropriate taxing authority and any bonafide refunds made to customers.
We may, but are not required to, reduce the Royalty for a period of time for up to the first five qualified Franchisees that acquire a Southern Steer Business. The amount the Royalty may be reduced and the time period the Royalty may be reduced by will depend on a variety of factors, including a Franchisee's business experience and net worth. We have the right to increase any fees due from You, as well as any charges for products, materials, and services provided to You, based on Our reasonable judgment, from time to time (other than the Royalty Fee percentage).
If You have not timely reported Your Gross Revenues to Us for any reporting period, then We shall be authorized, at Our option, to debit Your account for the higher of: (a) the fees transferred from Your account (or otherwise paid to Us through other means) for the last reporting period for which a report of Your Gross Revenues was provided to Us, or (b) an estimated amount due.
Source: Item 6 — ITEM. 6 OTHER FEES (FDD pages 11–16)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, the royalty fee is calculated based on a percentage of gross revenues, with the percentage decreasing as revenue increases. Specifically, beginning in the third month from the Required Opening Date, the royalty is 6% of annual Gross Revenues from $1.00 to $1,000,000, 5% from $1,000,001 to $2,000,000, and 4% from $2,000,001 and greater. The gross revenue calculation resets each calendar year and is based on each individual Southern Steer Business operated by the franchisee. Payments are due every Wednesday for the preceding week and are made via electronic fund transfer (EFT) or automatic withdrawal, although Southern Steer reserves the right to designate another day of the week for payment.
Gross Revenues are defined as sales from all products and services sold from, through, at, or in connection with the Southern Steer Business, whether cash, credit, barter, or otherwise, excluding applicable sales, use, or service taxes. This includes sales from on-site or off-site consumption, delivered products and services, and wholesale sales, if any. The term also includes proceeds from any business interruption insurance maintained by the franchisee. Excluded from gross revenues are sales, use, or gross receipts taxes collected from customers and remitted to the appropriate taxing authority, as well as any bonafide refunds made to customers.
Southern Steer may reduce the royalty fee for up to the first five qualified franchisees, depending on factors like business experience and net worth. However, Southern Steer also retains the right to increase any fees due from the franchisee, except for the royalty fee percentage, based on their reasonable judgment. If a franchisee fails to report gross revenues in a timely manner, Southern Steer is authorized to debit the franchisee's account for the higher of the fees transferred from the account for the last reporting period or an estimated amount due. This policy ensures consistent revenue reporting and payment of royalties.