Does Southern Steer warrant or guarantee that a Multi-Unit Developer will derive income or profit from their Southern Steer Businesses?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
The Multi-Unit Developer and Controlled Entity acknowledge that, it has not received any estimates, projections, representations, warranties or guaranties, expressed or implied, regarding potential sales, revenues, income, profits, earnings, expenses, financial or business success, value of the Southern Steer Businesses, or other economic matters pertaining to the Multi-Unit Developer's or Controlled Entity's Southern Steer Businesses from the Franchisor or any of its agents that were not expressly set forth in the Franchise Disclosure Document received by the Multi-Unit Developer and Controlled Entity (if any) from the Franchisor ("Representations").
The Multi-Unit Developer and Controlled Entity further acknowledges that if it had received any such Representations, it would not have executed this Agreement, promptly notified the Executive Management of the Franchisor in writing of the person or persons making such Representations and provided to the Franchisor a specific written statement detailing the Representations made.
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 the 2025 Southern Steer FDD, Southern Steer does not provide any guarantees regarding the potential financial success of a Multi-Unit Developer's Southern Steer businesses. The FDD emphasizes that the success of the venture is dependent on the Multi-Unit Developer's personal efforts, management skills, the performance of their employees, and the economic conditions prevalent in the specific location of the businesses, as well as the overall economic climate.
Southern Steer explicitly states that Multi-Unit Developers acknowledge they have not received any guarantees or warranties, whether expressed or implied, regarding potential sales, revenues, income, profits, earnings, expenses, financial or business success, or the value of their Southern Steer Businesses from Southern Steer or its agents, unless such representations are expressly documented in the Franchise Disclosure Document itself. This acknowledgement is a critical component of the agreement, ensuring that developers understand the risks involved and are not relying on any undocumented promises of profitability.
The FDD also stipulates that if a Multi-Unit Developer did receive any such representations outside of the FDD, they are obligated to notify Southern Steer's Executive Management in writing, providing a detailed account of the representations made and by whom. This clause serves to protect Southern Steer from unauthorized claims and ensures that all potential developers are operating under the same understanding of the risks and opportunities involved. This is a common practice in franchising, as franchisors typically avoid making earnings claims outside of Item 19 of the FDD due to regulatory and legal considerations.