What losses does the Southern Steer franchisee indemnify the Payee and Depository from?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
The Depositor agrees with respect to any action taken pursuant to the above authorization:
- (1) To indemnify the Depository and hold it harmless from any loss it may suffer resulting from or in connection with any debit including, without limitation, execution and issuance of any check, draft or order, whether or not genuine, purporting to be authorized or executed by the Payee and received by the Depository in the regular course of business for the purpose of payment, including any costs or expenses reasonably incurred in connection therewith.
- (2) To indemnify the Payee and the Depository for any loss arising in the event that any such debit will be dishonored, whether with or without cause and whether intentionally or inadvertently.
- (3) To defend, at the Depositor's own cost and expense, any action which might be brought by any persons or Entities because of any actions taken by the Depository or the Payee pursuant to the foregoing request and authorization, or in any manner arising by reason of the Depository's or the Payee's participation therein.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, the franchisee agrees to indemnify the Depository and hold it harmless from any loss it may suffer resulting from or in connection with any debit including, without limitation, execution and issuance of any check, draft or order, whether or not genuine, purporting to be authorized or executed by the Payee and received by the Depository in the regular course of business for the purpose of payment, including any costs or expenses reasonably incurred in connection therewith. The franchisee also agrees to indemnify the Payee and the Depository for any loss arising in the event that any such debit will be dishonored, whether with or without cause and whether intentionally or inadvertently. The franchisee is also responsible to defend, at the franchisee's own cost and expense, any action which might be brought by any persons or Entities because of any actions taken by the Depository or the Payee pursuant to the foregoing request and authorization, or in any manner arising by reason of the Depository's or the Payee's participation therein.
In simpler terms, this means that as a Southern Steer franchisee, you are financially responsible for any losses incurred by the bank (Depository) or Southern Steer Franchising International, LLC (Payee) due to electronic fund transfers. This includes situations where a payment is not honored, whether due to a mistake or intentionally, and any legal actions that arise from these transactions.
This indemnification clause is a standard practice in franchising, designed to protect the franchisor and its financial institutions from liabilities caused by the franchisee's business operations. It is important for a prospective Southern Steer franchisee to understand the scope of this obligation and to ensure they have adequate financial resources and insurance coverage to meet these potential liabilities. Franchisees should consult with a legal and financial advisor to fully understand the implications of this clause.