Under what circumstances can the initial term of the Southern Steer agreement be extended?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
anchisee will not have the right to franchise, sub-franchise, license or sublicense its rights under this Agreement. The Franchisee will not have the right to Transfer this Agreement or its rights under this Agreement, except as specifically provided for in this Agreement.
2. TERM OF AGREEMENT.
- 2.1. Term. The initial term ("Initial Term") of this Agreement will commence on the Effective Date and will be for a period of 10 years, unless terminated sooner in accordance with this Agreement. The Initial Term may be extended under certain circumstances to coincide with the term of the lease for Franchisee's Southern Steer Business. This Agreement will not be enforceable until it has been signed by both the Franchisee and the Franchisor.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, the initial term of the franchise agreement is typically 10 years. However, the agreement can be extended under two specific circumstances. First, the initial term may be extended to coincide with the term of the lease for the franchisee's Southern Steer Business. This means if the lease extends beyond the initial 10-year franchise term, the franchise agreement can be adjusted to match the lease duration.
Second, if a casualty event forces the Southern Steer Business to close, the initial term of the agreement will be extended for the period from the closure date until the date the business reopens. This extension ensures that the franchisee is not penalized in terms of franchise term length due to unforeseen circumstances that cause a temporary closure of the business.
These provisions offer some flexibility to Southern Steer franchisees, aligning the franchise term with the lease and accounting for potential disruptions caused by unforeseen events. It is important for prospective franchisees to understand these extension conditions, as they can impact the overall duration and obligations of the franchise agreement.