What working capital requirements does a Southern Steer Multi-Unit Developer have to meet?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- Working Capital. The Multi-Unit Developer will, at all times, maintain sufficient working capital to both operate the Southern Steer Businesses and to fulfill its development obligations under this Agreement.
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 Franchise Disclosure Document, a Multi-Unit Developer must maintain sufficient working capital to operate Southern Steer Businesses and fulfill their development obligations under the Multi-Unit Development Agreement.
This requirement ensures that Multi-Unit Developers have the financial resources necessary to successfully manage and expand their Southern Steer operations. It covers not only the day-to-day operational costs of existing locations but also the expenses associated with opening new locations according to the agreed-upon Development Schedule.
The FDD stipulates that failure to maintain sufficient working capital constitutes a material breach of the agreement. This highlights the importance Southern Steer places on the financial stability and growth capacity of its Multi-Unit Developers.
Prospective Multi-Unit Developers should carefully assess their financial resources and create a detailed financial plan to ensure they can meet this ongoing working capital requirement. They should also seek clarification from Southern Steer regarding specific metrics or benchmarks used to evaluate 'sufficient' working capital to avoid any potential misunderstandings or breaches of contract.