When must a Southern Steer franchisee obtain the required insurance policies?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
sent, at any time or times, effective immediately upon notice to Franchisee. Each of the foregoing covenants is to be construed as severable and independent and is intended to protect Franchisor, its Affiliates, and their successors and assigns and may be enforced by any of them.
- 16.10. Independent Obligation. The obligations set out in this Section 16 are independent of any obligation of Franchisor under this Agreement.
17. INSURANCE; INDEMNIFICATION
17.1. Franchisee's Insurance.
(a) Insurance Policies. The Franchisee must, at its expense, procure and maintain in full force and effect insurance policies, in such amounts and on such terms, as prescribed below or by the Franchisor in the Brand Manual, by an insurance company which is acceptable to and approved by the Franchisor at all times during the Initial Term of this Agreement and any Interim Period, licensed in the state where coverage is provided, and carries an A.M. Best rating of at least A-VII. The Franchisee must obtain such policies before opening the Southern Steer Business. The Franchisee must also procure and pay for all other insurance required by state or federal law, including, without limitation, workers' compensation and unemployment insurance. Nothing in this Agreement will prevent the Franchisee from purchasing insurance with coverage amounts in excess of the coverage amounts required by the Franchisor.
- (b) Coverage. Insurance policies must insure the Franchisee, the Franchisor, and their respective Affiliates, officers, stockholders, directors, and all other parties designated by the Franchisor, as additional named insureds against any liability that may accrue against them by reason of the ownership, maintenance or operation by Franchisee of the Southern Steer Business.
- (c) Requirements. The policies must also stipulate that the Franchisor will receive a 30-day prior written notice of cancellation, non-renewal, or elimination, and must contain endorsements by the insurance companies waiving all rights of subrogation against the Franchisor.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, a franchisee must secure the required insurance policies before opening their Southern Steer Business. These policies must remain in full effect throughout the initial term of the Franchise Agreement and any interim periods. The insurance must be obtained from a company acceptable to and approved by Southern Steer, licensed in the state where coverage is provided, and with an A.M. Best rating of at least A-VII. Franchisees are also responsible for procuring and paying for any other insurance required by state or federal law, including workers' compensation and unemployment insurance.
The insurance policies must cover Southern Steer, its affiliates, officers, stockholders, directors, and any other parties designated by Southern Steer as additional named insureds. This coverage protects against any liability that may arise from the franchisee's ownership, maintenance, or operation of the Southern Steer Business. Furthermore, the policies must stipulate that Southern Steer receives a 30-day prior written notice of cancellation, non-renewal, or elimination of coverage, and must include endorsements waiving all rights of subrogation against Southern Steer.
To ensure compliance, franchisees must provide Southern Steer with original or duplicate copies of all insurance policies, certificates of insurance, or other acceptable proof of insurance, including original endorsements, along with proof of payment, before opening the Southern Steer Business. Failure to obtain and maintain the required insurance constitutes a material breach of the Franchise Agreement, potentially leading to termination of the agreement or other default remedies. Southern Steer retains the right, but not the obligation, to purchase insurance on the franchisee's behalf if the franchisee fails to do so, with the franchisee responsible for reimbursing Southern Steer for the full cost plus a reasonable service charge.