What was the total royalty income for Southern Steer for the year ended September 30, 2022?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
for clients investing in a t least 3 locations.
Royalty Payments
The Company also earns royalties based on gross revenue of its franchisees, ranging from three to five percent. The royalty rate schedule is regressive, computed as 5% for annual sales under $1MM, then dropping to 4% for additional sales up to $2M
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 Southern Steer's 2025 Franchise Disclosure Document, the company earns royalties from its franchisees based on their gross revenue. The royalty rate is structured on a regressive scale: 5% for annual sales under $1 million, 4% for additional sales up to $2 million, and 3% for all yearly revenue exceeding $2 million. However, the document does not explicitly state the total royalty income Southern Steer received for the year ended September 30, 2022.
While the FDD provides details on how Southern Steer calculates royalty payments, it does not disclose the actual amount of royalty income received during that specific period. This information is crucial for potential franchisees to understand the financial performance and stability of the franchisor.
A prospective Southern Steer franchisee should inquire directly with the franchisor about the total royalty income received for the year ended September 30, 2022. Additionally, they may want to request historical financial statements to analyze trends in royalty income and assess the overall financial health of the Southern Steer franchise system.