What happens if a Southern Steer Franchisee fails to obtain the required insurance?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
r non-payment of rent or other legal reasons or the Franchisee is evicted from the Franchised Location.
- 20.2. Notice of Termination. If this Agreement is terminated by the Franchisor pursuant to Section 20.1, then the Franchisor will give the Franchisee written notice that this Agreement is terminated and, in that event, the effective date of termination of this Agreement will be the date of the written notice of termination is delivered to the Franchisee in accordance with the notice provision set out in Section 29.
- 20.3. Termination after Failure to Cure. The Franchisee will be deemed to be in Default under this Agreement and the Franchisor has the right to exercise its remedies described in Sections 20.4 and 20.5, including termination of this Agreement and all rights granted under this Agreement if: (i) within 30 days after Franchisor sends the Franchisee written notification setting out the nature of the default ("Notice of Default"); (ii) within any shorter period expressly set forth in the following clauses as to such Default;
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, franchisees must maintain specific insurance policies. The Franchise Agreement outlines several scenarios where failure to comply with its terms can lead to default and potential termination of the agreement. Specifically, if a Southern Steer franchisee fails to meet the insurance requirements detailed in the Brand Manual or any other agreement with Southern Steer, it constitutes a breach of the Franchise Agreement.
If the franchisee fails to correct this breach within a specified cure period after receiving written notification (a Notice of Default) from Southern Steer, the franchisor has the right to exercise its remedies. These remedies include terminating the Franchise Agreement and all rights granted to the franchisee. The cure period allows the franchisee a window to rectify the issue, such as obtaining the necessary insurance coverage, before Southern Steer takes further action.
It is important to note that the obligations outlined in the Franchise Agreement are independent of any obligations Southern Steer may have. This means the franchisee cannot excuse their non-compliance (such as failing to maintain insurance) based on any alleged failure by Southern Steer to fulfill its own obligations. The franchisee bears the sole responsibility for securing and maintaining the required insurance coverage throughout the term of the agreement. Prospective franchisees should carefully review the insurance requirements and default provisions within the Franchise Agreement to understand their obligations and the potential consequences of non-compliance.