Before transferring Ownership Interests, to whom must the Southern Steer Multi-Unit Developer or Owners first offer those interests?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
The Ownership Interests owned by the Multi-Unit Developer or by the Owners of the Multi-Unit Developer may not be Transferred or otherwise disposed of by the Multi-Unit Developer or the Owners until the Ownership Interests have first been offered to the Franchisor in writing.
If the Multi-Unit Developer or the Owners desire to Transfer their Ownership Interests, then they will first offer the Ownership Interests in the Multi-Unit Developer to the Franchisor in writing under the same terms and conditions as being offered to any party.
The Franchisor will have 30 days within which to accept any offer to purchase the Owner's Ownership Interest in the Multi-Unit Developer.
The Owner will be required to comply with the provisions of Section 7 if the Franchisor does not exercise its right to purchase the Owner's Ownership Interest.
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, if a Multi-Unit Developer or the Owners of the Multi-Unit Developer wish to transfer their Ownership Interests, they must first offer those interests in writing to Southern Steer itself (the Franchisor). This gives Southern Steer the first option to purchase the Ownership Interests under the same terms and conditions being offered to any other party.
Southern Steer has 30 days to accept the offer to purchase the Ownership Interests. If Southern Steer chooses not to exercise its right to purchase, the Owner must then comply with the provisions outlined in Section 7 of the agreement. This section likely contains further requirements or restrictions on transferring ownership to another party.
This clause ensures that Southern Steer retains control over who becomes involved in the ownership of its franchised businesses. It allows Southern Steer to maintain brand standards and protect its interests by carefully vetting potential new owners. For a prospective franchisee, this means that exiting the business may require more steps than simply selling to a third party, as Southern Steer has the first right of refusal.