What is the Southern Steer franchisee's obligation if the franchised location is damaged or destroyed?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.12.
Damage or Destruction.
If the Franchised Location is either partially or completely destroyed by fire or any catastrophe during the Initial Term or any Interim Period of this Agreement and the term of the underlying Lease for the Franchised Location, then the Franchisee will (a) subject to the
provisions of the Lease, use the building insurance proceeds to repair or reconstruct the Franchised Location as set forth herein and, if such proceeds are insufficient to fully restore the Franchised Location (or relocate from the Franchised Location), the Franchisee will be responsible for making up any such deficit, (b) within 30 days thereafter, initiate the process to commence the repairs and reconstruction necessary to restore the Southern Steer Business to its original condition prior to such casualty, and (c) recommence operations of Franchisee's Southern Steer Business as soon as commercially practicable.
If the Southern Steer Business cannot be restored to its original condition, then the Franchisee will relocate the Southern Steer Business as provided for in Section 1.5 (except the Franchisee will not be required to pay a Relocation Fee).
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, if the franchised location is partially or completely destroyed by fire or any other catastrophe during the initial term or any interim period of the agreement, the franchisee has specific obligations. Subject to the lease provisions, the franchisee must use building insurance proceeds to repair or reconstruct the location. If these proceeds are insufficient to fully restore the location, the franchisee is responsible for covering the deficit.
Within 30 days of the incident, the franchisee must begin the repair and reconstruction process to restore the Southern Steer business to its original condition. The franchisee is then required to recommence operations as soon as commercially practicable.
If the Southern Steer business cannot be restored to its original condition, the franchisee is obligated to relocate the business. In this case, the franchisee will not be required to pay a relocation fee, which is typically required for relocation under other circumstances.