After termination, is an Associate of a Southern Steer franchisee prohibited from having any interest in a Competitive Business within 50 miles of the Franchised Location?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Post-Term Covenant Not to Compete. For a period of 24 months after the termination or expiration of the Associate's employment or affiliation with the Franchisee, Associate will not, on Associate's own account or as an employee, principal, agent, franchisee, independent contractor, consultant, affiliate, licensee, partner, officer, director, shareholder, member, manager, governor or owner of any other person or entity, own, operate, lease, franchise, conduct, engage in, be employed by or connected with, have any interest in or assist any person or entity engaged in any Competitive Business or Competitive Activity within:
- (i) the Protected Area;
- (ii) within 50 miles of the outer boundaries of the Protected Area;
- (iii) within 50 miles from the Franchised Location;
- (iv) within 50 miles of any other Southern Steer Business, or
- (v) within any Protected Area or territory granted by the Franchisor pursuant to a Multi-Unit Development Agreement, franchise agreement, license agreement or other territorial agreement.
The Associate expressly agrees that the nature of both the Franchisee's and the Franchisor's business is such that if Associate were to directly or indirectly act in violation hereof in connection with a Competitive Business or Competitive Activity it would be virtually impossible for the Associate not to rely on or use the Confidential Information and Trade Secrets.
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, an Associate of a Southern Steer franchisee is restricted from involvement with a Competitive Business after their employment or affiliation ends. Specifically, for 24 months after termination or expiration, the Associate cannot own, operate, be employed by, or have any interest in a Competitive Business within certain geographic areas. This includes within 50 miles from the Franchised Location.
This post-term covenant not to compete extends beyond just the immediate location. It also includes the Protected Area, 50 miles of the outer boundaries of the Protected Area, 50 miles of any other Southern Steer Business, and any Protected Area or territory granted by Southern Steer under a Multi-Unit Development Agreement, franchise agreement, license agreement, or other territorial agreement. This wide-ranging restriction is designed to protect Southern Steer's market and prevent former associates from using confidential information gained during their affiliation to compete against the franchise.
The Associate acknowledges that they will have access to Confidential Information and Trade Secrets pertaining to the operation of the Southern Steer Business. The Associate also acknowledges that the Confidential Information and Trade Secrets developed and utilized in connection with the operation of the Southern Steer Business are unique and the exclusive property of the Franchisor or its Affiliates, and that any unauthorized disclosure or use of the Confidential Information and Trade Secrets would be wrongful and would cause irreparable injury and harm to the Franchisor or its affiliates.
Southern Steer emphasizes the importance of these restrictions, stating that if an Associate violates the covenant, it would be virtually impossible for them not to rely on or use the Confidential Information and Trade Secrets. This highlights the franchisor's concern about protecting its proprietary information and maintaining a competitive edge in the market. Prospective franchisees should carefully review these non-compete terms and ensure their associates understand and agree to them, as they are a critical component of the franchise agreement.