What happens if the Southern Steer franchisee's bank dishonors a debit?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
- (j) any check or EFT issued by the Franchisee is dishonored because of insufficient funds (except where the check or EFT is dishonored because of an error in bookkeeping or accounting) or closed bank accounts;
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 a franchisee's check or EFT (electronic funds transfer) is dishonored due to insufficient funds or closed bank accounts, it constitutes a breach of the franchise agreement. However, this does not apply if the dishonor is due to an error in bookkeeping or accounting.
This clause protects Southern Steer from financial losses and operational disruptions that could arise from a franchisee's inability to meet their financial obligations. Dishonored payments can indicate financial instability, which could impact the franchisee's ability to maintain the standards and operations expected by Southern Steer.
Furthermore, Southern Steer has an 'Authorization to Honor Electronic Funds Transfers' form as Attachment D. This form requires the franchisee's bank to honor debits to Southern Steer and states that if any debit is not honored, whether with or without cause, the Depository (bank) will be under no liability whatsoever. The franchisee also agrees to indemnify both the Depository and Southern Steer for any loss arising if any debit is dishonored.