Under what conditions might Southern Steer reduce the Royalty fee for a franchisee?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
(1) Fees. Except where otherwise noted, all fees and costs payable to Us, Our affiliates or Our designees are non-refundable. We may, but are not required to, reduce the Royalty for a period of time for up to the first five qualified Franchisees that acquire a Southern Steer Business. The amount the Royalty may be reduced and the time period the Royalty may be reduced by will depend on a variety of factors, including a Franchisee's business experience and net worth. We have the right to increase any fees due from You, as well as any charges for products, materials, and services provided to You, based on Our reasonable judgment, from time to time (other than the Royalty Fee percentage). Fees paid to vendors or other suppliers may or may not be refundable depending on the vendors and suppliers. We reserve the right to require You to pay fees and other amounts due to Us via EFT, automatic withdrawal program or other similar means, as described in the Franchise Agreement and/or Brand Manual. If payments are required in this method, You must comply with Our procedures and perform all acts and deliver and execute all documents, including authorization (Attachment D to the Franchise Agreement) for direct debits from Your business bank operating account, which may be necessary to assist in or accomplish payment by this method. Under this procedure You shall authorize Us to initiate debit entries and/or credit correction entries to a designated checking or savings account for payments of fees and other amounts payable to Us and any interest that may be owed. You shall make the funds available to Us for withdrawal by EFT no later than the payment due date. If You sign the MUDA, for the second and each subsequent Franchise Agreement You sign for the Southern Steer Business, You will pay the fees at the rate specified in Our then-current form of Franchise Agreement.
Source: Item 6 — ITEM. 6 OTHER FEES (FDD pages 11–16)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, Southern Steer may reduce the royalty fee for a limited number of franchisees. Specifically, the FDD indicates that Southern Steer may, but is not required to, reduce the royalty for up to the first five qualified franchisees that acquire a Southern Steer Business.
The decision to reduce the royalty fee, as well as the amount and duration of the reduction, depends on several factors. These factors include the franchisee's business experience and net worth. This suggests that Southern Steer may offer incentives to attract franchisees with strong financial backgrounds or proven business acumen.
It is important to note that this royalty reduction is not guaranteed and is subject to Southern Steer's discretion. Prospective franchisees should inquire about the specific criteria and process for qualifying for a reduced royalty fee. Understanding these factors can help potential franchisees assess their eligibility and negotiate terms during the franchise agreement process.