After termination, what is the geographic restriction around other Southern Steer businesses for a former franchisee's competitive activities?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Post Term Covenant Not to Compete.
For a period of 24 months after the later of (1) the termination, transfer, assignment or expiration of this Agreement; or (2) the entry of a final order by an arbitrator or a court of competent jurisdiction enforcing this covenant, Franchisee and those persons identified in Section 16.3 will not engage in any Competitive Activity within:
i. the Franchised Location;
ii. the Protected Area;
iii. within 50 miles of the outer boundaries of the Protected Area;
iv. within 50 miles from the Franchised Location;
v. within 50 miles of any other Southern Steer Business, or
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, a former franchisee is restricted from engaging in any competitive activity for 24 months after the termination, transfer, assignment, or expiration of the Franchise Agreement; or after the entry of a final order by an arbitrator or a court enforcing this covenant, whichever is later.
The geographic scope of this restriction includes several areas. First, the physical Franchised Location itself. Second, the Protected Area that was defined in the franchise agreement. Third, an area within 50 miles of the outer boundaries of the Protected Area. Fourth, an area within 50 miles from the Franchised Location. Finally, an area within 50 miles of any other Southern Steer Business.
This non-compete agreement prevents former franchisees from leveraging Southern Steer's confidential information, trade secrets, and brand recognition to unfairly compete with existing franchisees or the franchisor. The restrictions are designed to protect Southern Steer's market share and maintain the integrity of the brand. Prospective franchisees should carefully consider these post-term obligations and how they might impact their future business ventures after leaving the Southern Steer system.