Under what circumstances will the Southern Steer franchisee be required to reimburse the franchisor for taxes?

According to the 2025 Southern Steer Franchise Disclosure Document, a franchisee may be required to reimburse the franchisor for taxes under specific circumstances. If any taxing authority imposes a "franchise" or other tax on Southern Steer that is based upon the franchisee's gross revenues, receipts, sales, business activities, or operation of the Southern Steer business, the franchisee is responsible for reimbursing Southern Steer for these taxes.

This reimbursement must occur within 15 days of the franchisee receiving an invoice from Southern Steer for the amount of such taxes. This means that if a new tax law or interpretation arises that taxes the franchisor based on the franchisee's store-level performance, the franchisee bears the financial burden of that tax.

This condition is important for prospective franchisees to consider, as it adds a layer of potential unforeseen expenses tied directly to the performance and location of their specific franchise unit. Franchisees should seek clarification on what types of taxes this provision covers and how Southern Steer will handle disputes with taxing authorities to minimize potential financial risks.