Under what conditions can the franchisor terminate the Southern Steer franchise agreement with cause?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | 2.1 | 10 years beginning as of the Effective Date (which may be extended under certain circumstances to coincide with the term of the lease for Your Southern Steer Business, as described in Section 2.1 of the Franchise Agreement). |
| b. | Renewal or extension of the term | 2.2 | One additional 10-year term. |
| c. | Requirements for franchisee to renew or extend | 2.2 Section in Franchise | You must: give written notice at least 180, but not more than 365 days before expiration; have complied with all material terms and conditions of Your current Franchise Agreement; have paid all monetary obligations owed to Us during the term of the Franchise Agreement; agree in writing to remodel Your Southern Steer Business (and provide evidence of Your financial capability to make such expenditures); have the right to continue to occupy the premises for the Southern Steer Business for at least five additional years;; pay the Successor Franchise Fee; execute a general release of claims against Us, Our parent, subsidiaries, affiliates, and related people; and You and Your Designated Manager must complete the required training. You will sign a new Successor Franchise Agreement which may have materially different terms and conditions than Your original |
| Provision | Agreement | Summary Franchise Agreement. You must also have all licenses, insurance, registrations and approvals required by Us and applicable governing authorities to operate the Southern Steer Business in the Protected Area. | |
| d. | Termination by franchisee | Not applicable | You have no contractual right to terminate the Franchise Agreement for any reason. |
| e. | Termination by franchisor without cause | Not applicable | N/A |
| f. | Termination by franchisor with cause | 20.1 | If You breach the Franchise Agreement. |
| g. | "Cause" defined – curable defaults Section in Franchise | 20.3 | You will have 30 days to cure (unless such other period is specified in the Franchise Agreement) if You: provide false, misleading, incomplete or inaccurate information; fail to obtain the Site for the Southern Steer Business within three months of the date of the Franchise Agreement; fail to open Your Southern Steer Business by the Required Opening Date; fail to obtain licenses within 10 days before the Southern Steer Business opens; You or Your Operating Principal and Your Designated Manager fails to satisfactorily complete the Initial Training Program before the Southern Steer Business is scheduled to open; violate a law or regulation applicable to Your Southern Steer Business's operations; violate any material provision of the Franchise Agreement or Brand Manual; fail to pay any fees or expenses due to Us or third parties (including dishonored EFT or checks);; lose Your license; fail to appoint a replacement Designated Manager or Operating Principal to manage the day-to-day operations; fails to obtain prior written consents required by the Franchise Agreement; commits any other act that constitutes good cause under applicable law or court decisions; or breach any other agreement with Us. You have five days to cure a failure to pay any fees due to Us as required by the Franchise Agreement or any other agreement. |
| Provision | Agreement | Summary | |
| h. "Cause" defined – non curable defaults | 20.1 | We have the right (subject to state law and the Franchise Agreement) to terminate the Franchise Agreement immediately upon receipt of notice if: You or any of Your Owners or Designated Managers are convicted of or plead guilty or no contest to any law relating to Your Southern Steer Business or that adversely affects the operation, reputation or goodwill of the Southern Steer Business, Franchisor or the Marks; You or Your Guarantors are deemed insolvent, make a transfer for the benefit of creditors, file for bankruptcy that is not dismissed within 60 days of filing; abandon the Southern Steer Business; fail to provide, or permit Us to audit, Your financial records; materially impair the goodwill of the Marks or the System, subject to 24-hour cure period; violate any material provision two or more times during a 12- month period or four or more times during the term of the Franchise Agreement; commit any fraud or misrepresentation in the operation of Your Southern Steer Business; fail or refuse to maintain any insurance policy required by Us or otherwise fail or refuse to comply with Our insurance requirements; divert, conceal or fail to report Gross Revenues; engage in Competitive Activity; challenge or attempt to register any trademark, copyright or patent for the System, Marks, Confidential Information, Brand Manual, Trade Secrets or Franchisor's other proprietary information; intentionally or negligently disclose Franchisor's Confidential Information or Trade Secrets; violate the transfer provisions; create a sub-franchise; commission of a Default that is not curable by its nature; fail or refuse to comply with any mandatory specification, standard, or operating procedure prescribed by Us relating to the cleanliness or sanitation of Your Southern Steer Business, and You do not correct the breach within 24 hours after receipt of written notice from Us; violate any health, safety, or sanitation law, ordinance, or regulation that We reasonably believe may pose harm to the public or to the reputation of You, Us , or the System, and You do not correct the breach within 24 hours after receipt of written notice from Us. | |
| Section in Franchise |
Source: Item 17 — ITEM. 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–50)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, the franchisor can terminate the franchise agreement with cause if the franchisee breaches the agreement. The specific conditions for termination with cause are outlined in Section 20.1 of the Franchise Agreement.
Curable defaults, as detailed in Section 20.3, allow the franchisee a period to rectify the issue, typically 30 days unless otherwise specified in the Franchise Agreement. These include providing false information, failing to secure a site within three months, not opening by the required date, lacking necessary licenses, failing to complete training, violating laws or the Brand Manual, not paying fees, losing licenses, failing to appoint a replacement manager, not obtaining required consents, committing acts that constitute good cause under law, or breaching any other agreement with Southern Steer. A shorter cure period of five days applies to failure to pay fees.
Non-curable defaults, as described in Section 20.1, allow Southern Steer to terminate the agreement immediately upon notice, subject to state law and the Franchise Agreement. These include convictions of the franchisee, owners, or managers for laws relating to the business, insolvency, abandonment of the business, failure to provide financial records, impairing goodwill, repeated violations of the agreement, fraud, failure to maintain insurance, diverting revenues, engaging in competitive activity, challenging trademarks, disclosing confidential information, violating transfer provisions, creating a sub-franchise, committing defaults that are not curable, or failing to comply with cleanliness standards within 24 hours of notice or health, safety, or sanitation laws within 24 hours of notice.
These termination conditions are typical in franchise agreements, designed to protect the brand and ensure compliance with standards. Prospective Southern Steer franchisees should carefully review Section 20 of the Franchise Agreement to fully understand their obligations and the potential consequences of non-compliance.