Under what condition does the Southern Steer franchise agreement state that restrictions on competitive businesses do not apply?

According to the 2025 Southern Steer Franchise Disclosure Document, the restrictions on competitive businesses do not apply to employees that qualify as nonexempt under the Fair Labor Standards Act (FLSA). This means that Southern Steer franchisees are not required to have these employees sign a Non-Competition and Non-Disclosure Agreement.

This exception is important for franchisees to understand because it clarifies which employees are not bound by non-compete restrictions. The franchisee remains responsible for ensuring that all other individuals, such as owners, operating principals, designated managers, and certain employees with access to confidential information, do sign and adhere to these agreements.

The franchisee also bears the responsibility for enforcing these agreements, including covering any associated legal fees. This highlights the importance of carefully managing and protecting Southern Steer's confidential information and trade secrets by ensuring compliance with non-compete and non-disclosure terms among relevant personnel. The franchisor retains the right to regulate the form of these agreements and act as a third-party beneficiary with independent enforcement rights.