Under what conditions can Southern Steer terminate a franchise agreement before its expiration?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
4. Termination or Expiration.
- (a) Upon Lessee's default and failure to cure the default within the applicable cure period, if any, under either the Lease or the Franchise Agreement, Franchisor will, at its option, have the right, but not the obligation, to take an automatic assignment of Lessee's interest and at any time thereafter to re-assign or sublet the Lease to a new franchisee without Lessor's consent and to be fully released from any and all liability to Lessor upon the reassignment, provided Franchisee agrees to assume Lessee's obligations and the Lease.
- (b) Upon the expiration or termination of either the Lease or the Franchise Agreement, Lessor will cooperate with and assist Franchisor in securing possession of the Premises and if Franchisor does not elect to take an assignment of the Lessee's interest, Lessor will allow Franchisor to enter the Premises, without being guilty of trespass and without incurring any liability to Lessor, to remove all signs and all other items identifying the Premises as a Franchised Southern Steer Business and to make other modifications (such as repainting) as are reasonably necessary to protect the "Southern Steer Butcher" marks and system, and to distinguish the Premises from a Franchised Southern Steer Business. In the event Franchisor exercises its option to purchase assets of Lessee, Lessor will permit Franchisor to remove all the assets being purchased by Franchisor.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, the initial franchise agreement term is 10 years but can be terminated sooner under certain conditions. One such condition involves the franchisee's default and failure to cure it within the given cure period, as outlined in both the lease and the Franchise Agreement. In this case, Southern Steer has the option to take an automatic assignment of the franchisee's interest.
Additionally, if a franchisee attempts to terminate the agreement early or converts their Southern Steer business to another business, it will be considered a termination without cause and a breach of the agreement. This action does not relieve the franchisee of their obligations, and they will be required to fulfill all terms until the agreement expires or is terminated according to its provisions and applicable law.
Furthermore, Southern Steer retains the right to purchase the franchisee's business assets upon termination. This can occur if the agreement expires or is terminated by either party, if the franchisee wrongfully terminates the agreement by failing to comply with specified sections, or if the franchisee ceases to operate as a Southern Steer business. In such cases, the franchisee must provide written notice of their asking price for the major assets within two business days.