Under the Southern Steer MUDA, what is the minimum number of Southern Steer Business franchises that must be purchased?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) Development Fee. The MUDA is for the purchase of a minimum of three Southern Steer Business franchises. If You sign a MUDA, You will pay Us the nonrefundable Initial Franchise Fee for the first Southern Steer Business and a nonrefundable Development Fee based on the number of additional Southern Steer Businesses You agree to open. This chart reflects the requirement to purchase the minimum number of Southern Steer Business under the MUDA. Your Development Fee may be higher if You elect, subject to Our approval, to open more than three Southern Steer Business.
- (2) Initial Investment for First Southern Steer Business. If You sign the MUDA, You will incur the expenses listed in the preceding Item 7 chart for the first Southern Steer Business, including the Initial Franchise Fee.
- (3) Initial Investment for Each Additional Southern Steer Business. The estimated initial investment for each subsequent franchise purchased under the MUDA does not include an Initial Franchise Fee or Development Fee. However, the cost of training for each additional Southern Steer Business You open may be reduced based on Your operating performance of Your other Southern Steer Businesses. (4) Total. The Total includes the Development Fee You must pay at the time You enter into the MUDA as well as the Initial Franchise Fee and estimated range of fees You will incur to open and operate Your first Southern Steer Business and each additional Southern Steer Business described in the Item 7 chart above.
Source: Item 7 — ITEM. 7 ESTIMATED INITIAL INVESTMENT (FDD pages 17–21)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, a Multi-Unit Development Agreement (MUDA) requires the purchase of a minimum of three Southern Steer Business franchises. This agreement necessitates that the developer pays a nonrefundable Initial Franchise Fee for the first Southern Steer Business, along with a nonrefundable Development Fee that is determined by the number of additional Southern Steer Businesses the developer commits to opening. The Development Fee may increase if the developer chooses to open more than the minimum of three Southern Steer Business franchises, subject to Southern Steer's approval.
When a franchisee signs a MUDA with Southern Steer, they will incur the initial expenses detailed in Item 7 of the FDD for the first Southern Steer Business, including the Initial Franchise Fee. However, the estimated initial investment for each subsequent franchise purchased under the MUDA does not include an Initial Franchise Fee or Development Fee. The cost of training for each additional Southern Steer Business opened under the MUDA may be reduced based on the franchisee's operating performance of their other Southern Steer Businesses.
The total investment under a MUDA includes the Development Fee, which is paid upon entering the agreement, as well as the Initial Franchise Fee and the estimated range of fees required to open and operate the first Southern Steer Business and each additional Southern Steer Business. This structure is designed to facilitate and incentivize multi-unit development, offering potential cost savings on franchise and development fees for subsequent locations while still requiring a significant initial investment for each store's setup and operation.