When does the royalty payment obligation begin for a Southern Steer franchise?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
pment Agreement Exhibit E: Sample Release Exhibit F: State Agency/Agents for Service of Process Exhibit G: State-Specific Addendum Exhibit H: Brand Manual Table of Contents Exhibit I: Deposit Agreement Exhibit J: State Effective Dates and Receipt
ITEM. 6 OTHER FEES
| 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. | |
| Brand Fund | 1% of weekly Gross | At the time Royalty | Deposited in the brand and |
| Contribution(3) | Revenues. | is paid. | marketing fund ("Brand Fund") controlled by Us. We may increase, reduce, or suspend the Brand Fund Contribution upon prior notice. |
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, franchisees typically begin paying royalties starting the third month after their Required Opening Date. These royalty payments are calculated weekly and are due each Wednesday for the preceding week's gross revenues. The royalty fee 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. Payments are made via electronic fund transfer (EFT) or automatic withdrawal, though Southern Steer reserves the right to designate another day of the week for payment. The gross revenue calculation resets each calendar year and is based on each individual Southern Steer Business operated by the franchisee.
Notably, if a Southern Steer franchisee opens their business prior to their Required Opening Date, the royalty payment obligation still commences in the third month of opening the Southern Steer Business. This means that even if a franchisee is ahead of schedule, the royalty payment timeline remains consistent.
Southern Steer may, but is 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.