Is a bond required for Southern Steer franchisees or franchisors to obtain injunctive relief?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchisee and the Owners agree therefore, that if the Franchisor alleges that the Franchisee or the persons set out in Section 16.3 have breached this Section 16, then the Franchisor will have the right to petition a court of competent jurisdiction for injunctive relief against the Franchisee and the persons set out in Section 16.3, in addition to all other remedies that may be available to the Franchisor.
The Franchisor will not be required to post a bond or other security for any injunctive proceeding.
If the Franchisor is granted ex parte injunctive relief against the Franchisee or the persons set out in Section 16.3, then the Franchisee or the persons set out in Section 16.3 will have the right to petition the court for a hearing on the merits at the earliest time convenient to the court.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, Southern Steer is not required to post a bond or other security for any injunctive proceeding against a franchisee. This means that if Southern Steer seeks a court order to stop a franchisee from doing something (like violating a non-compete agreement), the brand does not have to put up money or other assets that could be forfeited if the injunction is later found to be unjustified. This clause applies if Southern Steer alleges that the franchisee has breached Section 16 of the franchise agreement.
However, if the court grants Southern Steer an ex parte injunctive relief (meaning an injunction without a full hearing), the franchisee has the right to request a hearing on the merits of the case at the earliest time convenient for the court. This provides a safeguard for the franchisee, allowing them to challenge the injunction and present their side of the story to the court.
This arrangement is generally favorable to the franchisor, as it lowers the barrier to obtaining injunctive relief. For a prospective Southern Steer franchisee, this means they should be especially diligent in understanding and complying with the terms of the franchise agreement, particularly those related to non-competition, to avoid the risk of an injunction without the protection of a bond.