What specific terms related to Southern Steer must the lease contain?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
chisor or any other party that the site for the Franchised Location chosen by the Franchisee will be a financial or operational success. The issuance of a no-objection letter by the Franchisor will only mean that it has received the Site Information provided by the Franchisee and reviewed the Site Information.
5.3. Purchase or Lease of Site. The Franchisee will provide the Franchisor with a copy of the proposed Lease for the site of the Franchised Location selected by the Franchisee at least 30 days before the date the Lease is to be signed. The Franchisor may, but is not required, to assist the Franchisee in negotiating the terms of the Lease. The Franchisor's review of the Lease will be only to determine whether the terms of the Lease comply with the terms and conditions of this Agreement, and not to provide any business, economic, legal or real estate advice or analysis. The Franchisee will be solely responsible for all terms of the Lease, including the enforceability, economics and legality of all provisions in the Lease. The enforceability of the Lease must be conditioned on Franchisor approving the Franchisee as a Southern Steer Franchisee and the enforceability of this Agreement. The Franchisee will not sign the Lease until (a) this Agreement has been signed by both the Franchisee and the Franchisor; and (b) the Lease contains the terms required under this Section and the terms set forth in the Form of Lease Addendum attached to this Agreement as Attachment F. The Franchisee will use its best efforts to negotiate and secure from the lessor of the Franchised Location the terms and conditions set forth herein and in the Form of Lease Addendum attached hereto. In addition, the terms of the Lease must also give the Franchisor the right to enter the premises of the Franchised Location to conduct inspections during regular business hours. Further, the Franchisee must execute a Collateral Assignment of Lease attached to this Agreement as Attachment F-1, whereby the Franchisee agrees to assign the Franchisee's rights in the Lease to the Franchisor in the event of a termination or expiration of the term of this Agreement or a default under the Lease. The Franchisee will provide executed copies of the Lease or purchase closing documents for the Franchised Location within 10 days after their execution. Franchisee will be required to execute a lease that complies with this Section within 90 days after the Effective Date.
5.4. Site Release. The Franchisor will have no duty or obligation to assist the Franchisee in the selection of a site for the Franchised Location, or to provide any assistance to the Franchisee in the purchase or lease of the Franchised Location. The Franchisor has informed the Franchisee that it does not have any experience or expertise in selecting real estate sites in the geographic area where the Franchisee's Southern Steer Business will be located and therefore, the Franchisor will not have any obligation, duty or liability to the Franchisee as a result of the site selected by the Franchisee and/or the purchase or lease of the Franchised Location. The Franchisee hereby releases the Franchisor and its Affiliates and their respective Executive Management, agents and employees, in their corporate and individual capacities, from any and all Claims by the Franchisee arising from, in connection with, or as a result of the Franchisee's purchase or lease of the site selected by the Franchisee for the Franchised Location.
5.5. Standard Plans and Specifications. The Franchisor will provide the Franchisee with a set of the template plans and specifications for a standard Southern Steer Business. The Franchisee acknowledges that unique aspects of each real estate site may require significant modifications to the standard plans. Consequently, the Franchisee will, at its cost, retain a licensed architect and will be responsible for the preparation of working drawings and construction and architectural plans and specifications for the Franchisee's Southern Steer Business. The Franchisee will be responsible for the accuracy of all drawings, plans and specifications for its Southern Steer Business, subject to the Franchisor's review and approval.
5.6. Compliance with Specifications and Standards.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, the lease for the Franchised Location must include specific terms to protect Southern Steer's interests and ensure compliance with the franchise agreement. The franchisee must provide Southern Steer with a copy of the proposed lease at least 30 days before signing. The enforceability of the lease must be conditional on Southern Steer approving the franchisee and the franchise agreement. The franchisee must also use their best efforts to negotiate and secure the terms and conditions outlined in the Form of Lease Addendum attached to the agreement. The franchisee will be required to execute a lease that complies with this section within 90 days after the Effective Date.
Specifically, the lease must grant Southern Steer the right to enter the premises for inspections during regular business hours. Additionally, the franchisee must execute a Collateral Assignment of Lease, assigning their rights in the lease to Southern Steer in the event of termination or expiration of the franchise agreement or a default under the lease. The franchisee must provide executed copies of the lease or purchase closing documents within 10 days after execution.
The lease should also acknowledge that the franchisee intends to operate a Southern Steer Business franchise and allow the franchisee to remodel, equip, paint, and decorate the interior of the premises, as well as display proprietary marks and signs, as required by the franchise agreement. The lease must allow the franchisee to assign or sublet the lease without the lessor's consent to Southern Steer, its affiliates, or another franchisee, or in connection with a merger, acquisition, or sale of the franchisee's business. The lessor must agree not to disturb the franchisee's possession of the premises if the lease is assigned.