Does the indemnification obligation extend to claims made by a Southern Steer franchisee's employees?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
Therefore, the Multi-Unit Developer and Controlled Entity's (if any) will indemnify and hold harmless the Franchisor Indemnified Parties against, and will reimburse the Franchisor Indemnified Parties for, all Damages that the Franchisor Indemnified Parties incur in the defense of or as a result of any Claim brought against the Franchisor Indemnified Parties arising from, in connection with, arising out of, relating to, or as a result of the Multi-Unit Developer's and/or Controlled Entity's (if any) negligence, wrongdoing, breach of this Agreement or the Multi-Unit Developer's and/or Controlled Entity's (if any) operation of their Southern Steer Businesses.
The Multi-Unit Developer will indemnify the Franchisor Indemnified Parties, without limitation, for all Damages arising from, out of, in connection with, relating to, or as a result of any and all Claims, including, but not limited to:
(a) any personal injury, property damage, commercial loss or environmental contamination resulting from any act or omission of the Multi-Unit Developer and/or Controlled Entity (if any) or their Executive Management, employees, agents or representatives;
(b) any failure on the part of the Multi-Unit Developer and/or Controlled Entity (if any) to comply with any requirement of any federal or state laws or any rules or regulations of any Governmental Authority;
Source: Item 5 — and 7 of the FDD, Section 3.1 of the Franchise Agreement and Section 4.1 of the Multi-Unit Development Agreement are hereby amended to state that payment of the initial franchise fee and development fee will be deferred until We have satisfied Our pre-opening obligations, and You have commenced business operations. (FDD pages 168–290)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, the Multi-Unit Developer (franchisee) is obligated to indemnify the Franchisor Indemnified Parties. This indemnification extends to damages arising from claims related to the Multi-Unit Developer's or Controlled Entity's negligence, wrongdoing, breach of the agreement, or the operation of their Southern Steer Businesses. The Franchisor Indemnified Parties include the Franchisor and its Affiliates, along with their respective employees, Executive Management, Owners, directors, officers, attorneys, accountants, and agents. Therefore, the indemnification obligation does extend to claims made by a Southern Steer franchisee's employees.
The franchisee's indemnification responsibilities cover all damages the Franchisor Indemnified Parties incur in defending against or resulting from any claim connected to the franchisee's negligence, wrongdoing, breach of the agreement, or business operations. This includes, without limitation, claims for personal injury, property damage, commercial loss, or environmental contamination resulting from any act or omission of the Multi-Unit Developer and/or Controlled Entity (if any) or their Executive Management, employees, agents or representatives.
This means that if a Southern Steer franchisee's employee causes harm (personal injury, property damage, etc.) due to their actions or negligence, and a claim is brought against Southern Steer, the franchisee is responsible for covering the franchisor's damages and legal defense costs. This indemnification obligation also applies to failures by the franchisee to comply with federal or state laws or regulations. Prospective franchisees should carefully consider this broad indemnification clause and consult with a legal professional to fully understand their potential liabilities.