In the event of injunctive relief against an Associate for breaching the Southern Steer franchise agreement, is the Franchisee and/or Franchisor required to post a bond or other security?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) The Associate also agrees that money damages alone cannot adequately compensate the Franchisee or the Franchisor if there is a breach of this Agreement by Associate, and that injunctive relief against the Associate is essential for the protection of the Franchisor and the Franchisee. Associate agrees therefore that, if the Franchisee or the Franchisor alleges that Associate has breached this Agreement, then the Franchisee and Franchisor will have the right to petition a court of competent jurisdiction for injunctive relief against the Associate, in addition to all other remedies that may be available. The Franchisee and/or Franchisor will not be required to post a bond or other security for any injunctive proceeding. If ex parte injunctive relief is granted against the Associate, then the Associate will have the right to petition the court for a hearing on the merits at the earliest time convenient to the court.
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, if the Franchisee or Franchisor seeks injunctive relief against an Associate for breaching their agreement, neither party is required to post a bond or other security. This waiver of bond requirements is intended to protect Southern Steer's confidential information, trade secrets, and the integrity of the franchise system.
This provision means that Southern Steer can more easily obtain a court order to stop an Associate from actions like disclosing confidential information or competing unfairly, without having to put up money as a guarantee. This can be a significant advantage for Southern Steer in quickly addressing potential harm caused by an Associate's breach.
However, if an ex parte injunctive relief is granted against the Associate, the Associate has the right to petition the court for a hearing on the merits at the earliest time convenient to the court. This ensures that the Associate has an opportunity to challenge the injunction and present their side of the story.
This clause reflects a common practice in franchising, where franchisors seek to protect their brand standards and trade secrets through injunctive relief, and often include provisions waiving the bond requirement to facilitate quicker enforcement.