Under what circumstances can the Southern Steer franchise agreement be transferred to a beneficiary?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
in a separate account and the expenses of Franchisee's Southern Steer Business, including reasonable compensation and expenses of Franchisor and its agents will be charged to the account. Additionally, Franchisor will retain 50% of Gross Revenues for Franchisee's Southern Steer Business' as a management fee. Nothing contained herein will be construed to require Franchisor to operate Franchisee's Southern Steer Business in the case of Franchisee's inability to operate same, and the rights set forth herein may be exercised in the sole and absolute discretion of Franchisor.
- 18.4. Transfer of Agreement to Entity Owned by Original Signatories. If the Franchisee is an individual, this Agreement may be Transferred by the Franchisee to an Entity that is wholly owned by Franchisee without the payment of a Transfer Fee and without complying with Section 19 if the Franchisee is an individual or a general partnership, provided that the Owner or Owners of the Entity are the same person or persons who signed this Agreement and such Transfer will not result in a change in control of the Southern Steer Business, so long as the Franchisee provides the Franchisor with prior written notice of such Transfer and the Franchisee is not in default of any of its obligations under this Agreement. Notwithstanding the forgoing, if this Agreement is Transferred by the individual Franchisee to an Entity that is wholly owned by the Franchisee, the Franchisee must pay the Franchisor $1,000 prior to the Transfer for legal expenses incurred by Franchisor to prepare transfer documents.
- 18.5. Conditions to Transfer by Franchisee. Subject to the provisions of Section 19, the Franchisee will not Transfer any interest in or any part of this Agreement, any direct or indirect interest in Franchisee, or the Southern Steer Business to any person or Entity ("Transferee") without the prior written approval of the Franchisor. The Franchisor will not withhold its written consent to the Transfer by the Franchisee if Franchisor does not exercise its rights under Section 19 of this Agreement, the Transfer does not violate any of the terms of this Agreement, and the Franchisee is in full compliance with the following terms:
- (a) Franchisee, Operating Principal and Owners are in full compliance with this Agreement and all other agreements between Franchisor or its Affiliate and Franchisee, Operating Principal and/or Owner(s);
- (b) if the Transferee(s), its owners or affiliates are a party to any agreement with Franchisor or its Affiliates, they must be in full compliance with any such agreement;
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
Based on the 2025 Southern Steer Franchise Disclosure Document, the franchise agreement can be transferred under specific conditions, although the document does not explicitly detail transfer to a beneficiary. The FDD states that the franchise agreement can be transferred to an entity wholly owned by the franchisee without a transfer fee or compliance with Section 19, provided the franchisee is an individual or general partnership, the owners of the entity are the same as those who signed the agreement, and the transfer does not result in a change of control of the Southern Steer business. This is allowed as long as the franchisor receives prior written notice and the franchisee is not in default of any obligations under the agreement.
However, the FDD also stipulates that no owner can transfer an ownership interest in the franchisee without prior written approval from Southern Steer. The franchisor will not withhold consent if the transfer complies with the agreement terms and Southern Steer does not exercise its right of first refusal to acquire the owner's ownership interest. A transfer to a relative (husband, wife, children, grandchildren, mother, father, brothers, and sisters), an existing owner, or an entity wholly owned by the franchisee does not require a transfer fee.
For any transfer to be effective, Southern Steer must receive a fully executed copy of all transfer documents and provide written consent. The franchisee and owners must not transfer the agreement or ownership interests to any entity involved with a competitive business. If Southern Steer refuses a transfer to a competitor, the franchisee's only recourse is to have an arbitrator determine if the proposed transferee operates a competitive business, with the franchisee responsible for all arbitration costs. The FDD does not specifically address the process or requirements for transferring the agreement to a beneficiary upon the franchisee's death or incapacitation, so it is important to contact Southern Steer directly for clarification.