What constitutes an assignment for the benefit of creditors by a Southern Steer franchisee?

According to the 2025 Southern Steer Franchise Disclosure Document, an assignment for the benefit of creditors occurs when the franchisee or any guarantor makes an assignment for the benefit of creditors. It also includes entering into any similar arrangement for the disposition of its assets for the benefit of creditors.

In practical terms, this means that if a Southern Steer franchisee faces financial difficulties and transfers their assets to a third party to manage and distribute to their creditors, it is considered an assignment for the benefit of creditors. This can also include any similar agreement where the franchisee's assets are used to pay off debts.

This clause is important because it outlines a specific event that can trigger consequences under the franchise agreement. While the FDD does not explicitly state the consequences of such an assignment, it is typically a condition that allows the franchisor to terminate the franchise agreement. Prospective franchisees should seek clarification from Southern Steer regarding the specific repercussions of an assignment for the benefit of creditors.