What constitutes a material breach of the Southern Steer Franchise Agreement regarding insurance?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.2.
Supplier's Insurance.
The Franchisee agrees to require each supplier and independent contractor with whom it contracts ("supplier") to procure and maintain in full force and effect, at the sole cost and expense of such suppliers, insurance policies, in such amounts and on such terms, as prescribed by the Franchisor in the Brand Manual, insuring the supplier and the Franchisee, the Franchisor, and their respective Executive Management, agents, and employees from and against any and all loss, liability, claim or expense of any kind whatsoever, arising from or as a result of any negligence or other wrongdoing by the supplier or its employees in providing services or products to the Franchisee, the Franchisee's Southern Steer Business or to any customer or invitee of the Southern Steer Business.
- 17.3.
Defense of Claims.
All liability insurance policies procured and maintained by the Franchisee in connection with the Franchisee's Southern Steer Business, including the Franchisee's
employment practices liability policy, will require the insurance company to provide and pay for attorneys to defend any legal actions, lawsuits or claims brought against the Franchisee, the Franchisor, and their respective Owners, Executive Management, Designated Managers agents and employees.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
Based on the 2025 Southern Steer Franchise Disclosure Document, franchisees must ensure that their suppliers and independent contractors maintain specific insurance policies. These policies should cover the supplier, the franchisee, Southern Steer, and their respective management, agents, and employees against any losses, liabilities, claims, or expenses resulting from the supplier's negligence or wrongdoing in providing services or products to the franchisee, the Southern Steer business, or its customers. The insurance should be in the amounts and terms prescribed by Southern Steer in its Brand Manual.
Additionally, all liability insurance policies that the franchisee obtains for their Southern Steer business, including employment practices liability, must require the insurance company to provide and cover the costs of attorneys to defend against any legal actions, lawsuits, or claims brought against the franchisee, Southern Steer, and their respective owners, executive management, designated managers, agents, and employees.
The Franchise Disclosure Document does not explicitly state what constitutes a material breach regarding insurance. It outlines the insurance requirements for suppliers and the defense of claims but does not detail the consequences of failing to meet these requirements. A prospective franchisee should consult the Brand Manual and seek clarification from Southern Steer regarding what specific failures related to insurance coverage would be considered a material breach of the Franchise Agreement.