Under what conditions can a Southern Steer Multi-Unit Developer transfer their rights under the Multi-Unit Development Agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
dance with the terms and procedures set forth in such Franchise Agreement.
9. OPTION OF THE FRANCHISOR TO PURCHASE
- Notice. The Multi-Unit Developer will not Transfer or otherwise dispose of any interest in or any part of (a) the Multi-Unit Developer 's interest in this Agreement, including the right of the Multi-Unit Developer to develop Southern Steer Businesses in the Development Territory except as provided for in Section 7.2. The Multi-Unit Developer will not Transfer or otherwise dispose of any interest in or any part of any Ownership Interest in the Multi-Unit Developer ("Major Assets") to any purchaser without first offering the same to the Franchisor in a written offer that contains the purchase price, payment terms, and all other material terms and conditions of the proposed transaction with the third party, including price and payment terms ("Multi-Unit Developer's Offer"). The Franchisor will have 30 days after receipt of the Multi-Unit Developer's Offer to give the Multi-Unit Developer written notice of the Franchisor's desire to either waive its option to purchase ("Waiver Notice") or its intention to exercise its rights to purchase or acquire the Major Assets according to the terms contained in the Multi-Unit Developer's Offer ("Notice of Intent to Purchase").
- Due Diligence Review. If the Franchisor provides the Multi-Unit Developer with a Notice of Intent to Purchase within 30 days after receipt of the Multi-Unit Developer's Offer, then the Franchisor will have 90 days after the date the Notice of Intent to Purchase is received by the Multi-Unit Developer ("Notice Date") to conduct a due diligence review. The Multi-Unit Developer will promptly provide the Franchisor with all Financial Records and other information requested by the Franchisor or its representatives to conduct its due diligence review. The Franchisor will have the absolute and unconditional right to terminate the Notice of Intent to Purchase and any obligation to purchase the Major Assets from the Multi-Unit Developer for any reason and at any time during the 90-day due diligence review period by giving the Multi-Unit Developer written notice.
- Good Faith Negotiations. Unless the Franchisor terminates its Notice of Intent to Purchase as provided in Section 9.2, then the Multi-Unit Developer and the Franchisor will act in good faith to agree on the terms and conditions of the definitive agreement or agreements for the purchase of the Major Assets (other than those objective terms and conditions contained in the Multi-Unit Developer 's Offer) and the closing date for the sale of the Major Assets to the Franchisor will take place within 120 days after the Notice Date.
- Sale to Purchaser.
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 Southern Steer's 2025 Franchise Disclosure Document, a Multi-Unit Developer faces specific conditions regarding the transfer of their rights under the Multi-Unit Development Agreement. The Multi-Unit Developer cannot transfer their interest in the agreement or any part of their Ownership Interest without first offering it to Southern Steer. This offer must be written and include the purchase price, payment terms, and all other material terms of the proposed transaction with the third party.
Southern Steer has 30 days after receiving the Multi-Unit Developer's offer to provide written notice of either waiving their option to purchase or expressing their intention to exercise their rights to purchase the assets under the terms of the Multi-Unit Developer's offer. If Southern Steer chooses not to exercise its option to purchase and the Multi-Unit Developer proceeds to sell their assets to a third party, both the Multi-Unit Developer and the purchaser must still comply with the terms and conditions outlined in Section 7 of the agreement.
Furthermore, any transfer of the Multi-Unit Developer's Southern Steer Businesses that does not include a transfer of the Multi-Unit Development Agreement to the transferee will be considered a wrongful termination of the agreement by the Multi-Unit Developer. The Owners of the Multi-Unit Developer also cannot transfer their Ownership Interests until those interests have been offered to Southern Steer in writing, mirroring the process for transferring the agreement itself. Southern Steer has 30 days to accept the offer to purchase the Owner's Ownership Interest.