What constitutes a default under the Southern Steer Franchise Agreement regarding account balances?

According to the 2025 Southern Steer Franchise Disclosure Document, a franchisee will be considered in default of their agreement if any check or Electronic Funds Transfer (EFT) issued by them is dishonored due to insufficient funds or closed bank accounts. However, an exception is made if the dishonored check or EFT is due to an error in bookkeeping or accounting.

This provision is fairly standard in franchise agreements. It protects Southern Steer from financial losses and operational disruptions that could arise from a franchisee's inability to meet their financial obligations. It also incentivizes franchisees to maintain sound financial management practices and ensure sufficient funds are available to cover payments.

For a prospective Southern Steer franchisee, this means maintaining meticulous financial records and ensuring sufficient funds are always available to cover payments to Southern Steer. Failure to do so, even if unintentional (but not due to bookkeeping errors), can result in a default, potentially leading to termination of the franchise agreement and loss of the business. Franchisees should implement robust accounting procedures and regularly monitor their bank accounts to avoid such situations.