What was the royalty income for Southern Steer for the year ended September 30, 2022?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
for clients investing in a t least 3 locations.
Royalty Payments
The Company also earns royalties based on gross revenue of its franchisees, ranging from three to five percent. The royalty rate schedule is regressive, computed as 5% for annual sales under $1MM, then dropping to 4% for additional sales up to $2M
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 Southern Steer's 2025 Franchise Disclosure Document, the company earns royalties based on the gross revenue of its franchisees. These royalties range from three to five percent. The specific royalty rate is determined by a regressive schedule.
For annual sales under $1 million, the royalty rate is 5%. If a franchisee's annual sales are between $1 million and $2 million, the royalty rate drops to 4% for the additional sales above $1 million. For any yearly revenue exceeding $2 million, the royalty rate decreases further to 3%.
The FDD does not provide the exact royalty income that Southern Steer earned for the year ended September 30, 2022. To determine this amount, a prospective franchisee should ask Southern Steer for the specific royalty income earned during that period. This information will provide a clearer picture of the company's revenue streams and the potential royalty obligations for franchisees.