When does the Royalty Fee payment obligation commence for a Southern Steer franchisee?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
al Franchise Fee**") set out in Attachment A for the right to operate one Southern Steer Business in the Protected Area. The Franchisee acknowledges and agrees that the Initial Franchise Fee is fully earned by Franchisor upon Franchisee's execution of this Agreement and is non-refundable under any circumstances.
- 3.2. PAYMENTS DUE AFTER SIGNING THE FRANCHISE AGREEMENT. In addition to other fees and charges as may be described elsewhere in this Agreement, Franchisee will pay the following fees and charges to Franchisor, its Affiliates or third parties, as designated by Franchisor. The fees and charges are not refundable under any circumstance.
- (a) Royalty Fee.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, a franchisee's obligation to pay royalty fees begins the third month after their Required Opening Date. The royalty fee is a continuing weekly fee based on the Gross Revenues generated by the Southern Steer business during the preceding week.
For a prospective Southern Steer franchisee, this means that while they will incur various initial costs and fees prior to opening, the ongoing royalty payments will not start immediately upon opening. This provides a short grace period to establish the business and generate revenue before the weekly royalty obligations begin.
However, if a franchisee purchases an ongoing Southern Steer business (as a Transferee), they will pay the Royalty Fee beginning on the first week of their Required Opening Date. This means that the royalty payments start immediately for a franchisee who takes over an existing business, unlike a franchisee opening a new location.