How long does a Southern Steer franchisee have to remedy a failure to maintain required insurance policies?
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; or (iii) any longer cure period required by applicable law, the Franchisee does not correct the default to Franchisor's satisfaction for any of the following events (for the purposes of this Agreement, an alleged breach of this Agreement by the Franchisee will be deemed to be "corrected" if both the Franchisor and the Franchisee agree in writing that the alleged breach has been corrected):
- (a) the Franchisee has not purchased or leased a site for the Franchised Location within 90 days after the Effective Date of this Agreement;
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, a franchisee typically has 30 days to correct a default after receiving written notification from Southern Steer. However, this 30-day period may be shorter depending on the specific default, as outlined in the franchise agreement.
Specifically regarding insurance, if a Southern Steer franchisee fails to obtain or maintain the required insurance, Southern Steer has the option, but not the obligation, to purchase insurance on the franchisee's behalf. The franchisee is then required to reimburse Southern Steer for the full cost of the insurance, along with a reasonable service charge, within five business days of receiving an invoice detailing these costs.
Importantly, the FDD states that failure to obtain insurance is considered a material breach of the franchise agreement. This gives Southern Steer the right to terminate the agreement or pursue other default remedies. Therefore, while Southern Steer may provide a five-business-day window to reimburse them if they secure insurance on the franchisee's behalf, the franchisee's failure to maintain continuous insurance coverage can lead to immediate termination of the agreement.
Thus, a Southern Steer franchisee must prioritize maintaining required insurance policies to avoid potential default, termination, and associated financial repercussions. While a short cure period may be available to reimburse Southern Steer if they step in to secure coverage, the initial failure to maintain insurance is a serious breach with significant consequences.