Does the Southern Steer Multi-Unit Developer's indemnification obligation include claims by the 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 the 2025 Southern Steer Franchise Disclosure Document, the Multi-Unit Developer's indemnification obligations do extend to claims arising from the actions of their employees. Southern Steer's Multi-Unit Developer must indemnify the Franchisor Indemnified Parties for damages resulting from claims related to the Multi-Unit Developer's or their Controlled Entity's negligence, wrongdoing, breach of the agreement, or the operation of their Southern Steer Businesses. This indemnification includes covering the Franchisor Indemnified Parties' defense costs and any damages they incur due to such claims.
Specifically, the indemnification extends, without limitation, to damages arising from claims of personal injury or property damage resulting from any act or omission of the Multi-Unit Developer or their Controlled Entity, including their employees, agents, or representatives. It also covers failures to comply with federal or state laws or governmental regulations. This means that if a Southern Steer franchisee's employee causes injury or damage, or if the franchisee fails to comply with regulations, leading to a claim against Southern Steer, the Multi-Unit Developer is obligated to cover the resulting damages and legal costs.
This requirement places a significant responsibility on the Multi-Unit Developer to ensure proper training, compliance, and risk management within their Southern Steer businesses. The Multi-Unit Developer should maintain adequate insurance coverage and implement robust operational procedures to minimize the risk of incidents that could lead to indemnification claims. This is a common practice in franchising, where franchisors seek to protect themselves from liabilities arising from the actions of their franchisees and their employees.