What happens if a guarantor of a Southern Steer franchise is deemed insolvent?

According to the 2025 Southern Steer Franchise Disclosure Document, if a guarantor is deemed insolvent, it constitutes a default under the franchise agreement. Specifically, the agreement can be terminated if the Franchisee or Guarantor(s) are deemed insolvent within the meaning of applicable state or federal law.

Additionally, if an involuntary petition for bankruptcy is filed against the Franchisee and the Franchisee is unable within a period of 60 days from such filing to obtain the dismissal of the bankruptcy petition, or the Franchisee files for bankruptcy or is adjudicated a bankrupt under applicable state or federal law, this also constitutes a default.

These stipulations are fairly standard in franchising, as the financial stability of both the franchisee and any guarantors is crucial to the ongoing viability of the business and the protection of the Southern Steer brand. Prospective franchisees should carefully review the implications of these default provisions with their legal and financial advisors.