During the term of the agreement, can a Southern Steer franchisee engage in Competitive Activities?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- vii. Divert or attempt to divert, directly or indirectly, any business related to, or any customer or account of, Franchisee's Southern Steer Business, Franchisor, Affiliates, any Other Business operated by Franchisor its franchisees, licensees or Affiliates, or any other business then being offered or operated by Franchisor or its Affiliate(s) in the Protected Area.
- (b) In-Term Covenant Not to Compete. Franchisee acknowledges that Franchisor will be unable to protect the System, Confidential Information, Trade Secrets, Brand Manual, Franchisor's proprietary materials and other confidential and proprietary elements of the Southern Steer Business and achieve an exchange of ideas with Franchisee if Franchisee or those persons referenced in Section16.3 were permitted to hold competitive interests or engage in Competitive Activities. Therefore, during the Initial Term and any Interim Period, Franchisee and those persons referred to in Section 16.3 agree not to, directly or indirectly, engage in Competitive Activities anywhere other than as expressly authorized in writing by Franchisor. Franchise acknowledges that a violation of this Section 16.2(b) would constitute an unfair method of competition and would hinder Franchisee's ability to devote sufficient time to the Southern Steer Business.
- (c) Post Term Covenant Not to Compete.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, franchisees are generally prohibited from engaging in competitive activities during the term of their franchise agreement. Southern Steer emphasizes that protecting its system, confidential information, trade secrets, brand manual, and proprietary materials is crucial. The franchise agreement states that allowing franchisees to hold competitive interests or engage in competitive activities would hinder the exchange of ideas and the overall integrity of the Southern Steer business model.
Specifically, during the initial term and any interim period, franchisees and related parties are restricted from directly or indirectly engaging in competitive activities unless expressly authorized in writing by Southern Steer. The FDD defines "Competitive Activity" as offering products or services that are the same as, similar to, or competitive with a Southern Steer Business. It also includes operating a business that features butcher services, a specialty grocer, marinated meats, or food preparation classes, or that incorporates distinctive elements of the Southern Steer system.
Southern Steer franchisees acknowledge that violating this non-compete provision would constitute an unfair method of competition and would negatively impact their ability to dedicate sufficient time and effort to their Southern Steer Business. This restriction is in place to ensure that franchisees remain focused on growing their Southern Steer location and upholding the brand's standards and reputation. This type of restriction is standard practice in franchising to protect the brand and prevent franchisees from using the franchisor's knowledge to compete against them.