What is the royalty rate for Southern Steer franchisees on yearly revenue exceeding $2 million?
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 the 2025 Southern Steer Franchise Disclosure Document, the royalty rate is dependent on the gross revenue of its franchisees. The royalty rate schedule is regressive.
Southern Steer franchisees pay 5% for annual sales under $1 million. The rate then drops to 4% for additional sales up to $2 million.
For all yearly revenue beyond $2 million, the royalty rate falls to 3%. This regressive structure means that as a Southern Steer franchise increases its revenue, the percentage paid in royalties decreases, potentially incentivizing higher sales volumes.