Under what condition will Southern Steer terminate the Franchise Agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
(m) the Multi-Unit Developer, its Owners, Operating Principal, Guarantors, Controlled Entity or any individual breaches the non-compete and confidentiality covenants set out in the Franchise Agreement or the Non-Competition and Non-Disclosure Agreement;
(n) the Multi-Unit Developer has previously received notices of three or more defaults (whether different defaults noticed together or three separate instances of the same default) pursuant to Section 8.2 in a Development Period and is again in default of this Agreement within the Development Period, regardless of whether the previous defaults were cured by the Franchisee; or
(o) the Multi-Unit Developer transfers or otherwise assigns this Agreement or the rights to develop a Southern Steer Business hereunder, or an interest in the Multi-Unit Developer Entity, without complying with the provisions of Section7.2.
Termination by Franchisor- Thirty Days-Notice.
The Franchisor shall have the right to terminate this Agreement (subject to any state laws to the contrary, where state law shall prevail), effective upon 30 days written notice to the Franchisee ("Breach Notice"), if the Franchisee breaches any provision of this Agreement other than those provisions listed in Section 8.1 above and fails to cure the default during such 30 day period.
In that event, effective upon expiration of the 30 day period, this Agreement will terminate without further notice to the Franchisee.
Defaults shall include, but not be limited to, the following:
(a) the Multi-Unit Developer or Controlled Entity fails to maintain the then current operating procedures and adhere to the specifications and standards established by the Franchisor as set forth herein or in the Brand Manual, defined and described in the Franchise Agreement, or as otherwise communicated to the Franchisee;
(b) the Multi-Unit Developer fails, refuses or neglects to obtain the Franchisor's prior written approval or consent as required by this Agreement; or
(c) the Multi-Unit Developer commits any other act that constitutes good cause under applicable law or court decisions.
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 the 2025 Southern Steer Franchise Disclosure Document, Southern Steer has the right to terminate the Multi-Unit Development Agreement under several conditions. These include if the Multi-Unit Developer fails to maintain operating procedures, does not obtain required prior written approval from Southern Steer, or commits an act that constitutes good cause under applicable law or court decisions. These terminations are subject to any state laws to the contrary, where state law shall prevail. Southern Steer will provide a 30-day written notice to the franchisee, called a Breach Notice, to allow them time to correct the breach. If the franchisee fails to cure the default within the 30-day period, the agreement will terminate without further notice.
Additionally, Southern Steer can terminate the agreement if the Multi-Unit Developer, its Owners, Operating Principal, Guarantors, Controlled Entity, or any individual breaches the non-compete and confidentiality covenants in the Franchise Agreement or the Non-Competition and Non-Disclosure Agreement. Termination can also occur if the Multi-Unit Developer has previously received notices of three or more defaults in a Development Period and is again in default of the agreement within the same Development Period, regardless of whether the previous defaults were cured. Furthermore, Southern Steer can terminate the agreement if the Multi-Unit Developer transfers or assigns the agreement or the rights to develop a Southern Steer Business without complying with the provisions outlined in Section 7.2 of the agreement.
For a prospective Southern Steer franchisee, these termination conditions highlight the importance of adhering to the brand's operating procedures, maintaining open communication and obtaining necessary approvals from Southern Steer, and upholding all legal and contractual obligations. Failure to comply with these requirements could lead to the termination of the franchise agreement, resulting in the loss of rights to develop further Southern Steer Businesses and potentially impacting existing operations. It is crucial for franchisees to understand and comply with all terms of the agreement to avoid potential defaults and termination.