What specific actions are prohibited regarding the transfer or assignment of the Southern Steer Multi-Unit Development Agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor receives a completely executed copy of all assignment documents and the Franchisor consents to the assignment in writing. Any attempted assignment made without complying with the requirements of this Section 7.3 will be void.
- Transfer to Competitor Prohibited. The Multi-Unit Developer and the Owners will not transfer this Agreement or their Ownership Interests in the Multi-Unit Developer to any person or Entity that owns, operates, franchises, develops, consults with, manages, is involved in, or controls any Competitive Business or engages in any Competitive Activity.
8. TERMINATION RIGHTS OF THE FRANCHISOR
- Immediate Termination Rights of the Franchisor. The Multi-Unit Developer will be deemed to be in default and subject to immediate termination under this Agreement, or the exercise of the remedies set out in Section 8.6 without prior notice of the default from the Franchisor and without an opportunity to cure the default unless precluded by applicable law or otherwise as stated herein, if any of the following events occur:
- (a) the Multi-Unit Developer fails to comply with the Development Schedule set forth in Section 5 and Attachment A (does not have the required number of Southern Steer Businesses open and operating in the Development Territory as specified in the Development Schedule);
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, a Multi-Unit Developer is restricted from transferring the Development Agreement to specific parties. Specifically, the agreement cannot be transferred to any entity that owns, operates, franchises, develops, consults with, manages, is involved in, or controls any competitive business or engages in any competitive activity. This restriction is in place to protect Southern Steer's system, marks, reputation, and image.
Additionally, any transfer attempted without complying with the requirements outlined in Section 7.3 of the agreement will be considered void. The Multi-Unit Developer is also prohibited from transferring any interest in the agreement, including the right to develop Southern Steer businesses in the Development Territory, except as provided for in Section 7.2.
Furthermore, before transferring any ownership interest in the Multi-Unit Developer itself (referred to as "Major Assets"), the developer must first offer the same to Southern Steer with a written offer containing all material terms and conditions of the proposed transaction. Southern Steer then has 30 days to decide whether to waive its option to purchase or exercise its right to purchase the Major Assets according to the terms of the Multi-Unit Developer's offer. These measures ensure that Southern Steer retains control over who becomes involved in the development of their franchises and has the first right of refusal in case of a sale.