Does Southern Steer have any obligation to pay past-due obligations or arrearages of the franchisee when taking physical possession of the Franchised Location?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
ny and all rights and remedies of a secured party under the Uniform Commercial Code, as enacted in the jurisdiction in which enforcement is sought, or otherwise provided by law. If the Franchisor elects not to take physical possession of the Franchised Location following termination or expiration of this Agreement, it will have the right to enter upon the premises to ensure that the alterations required pursuant to Section 21.2 are made.
- 26.6. Proration of Rents and Expenses. At the time the Franchisor takes physical possession of the Franchised Location, all charges, real estate taxes, utilities and rentals will be prorated between the Franchisor and the Franchisee. The Franchisor will have no obligation to pay any past-due obligations or arrearages of the Franchisee to any person or Entity, including the Landlord.
- 26.7. Possession; Obligations of Franchisor and Franchisee. Subject to Section 26.6 the Franchisor will hold the Franchisee harmless from any and all obligations to the Landlord, including rental payments, arising out of the use of the Franchised Location from the date that the Franchisor takes physical possession of the Franchised Location. The Franchisee will pay all amounts due to the Landlord and other parties under the Lease including, but not limited to, rentals, common area maintenance expenses, insurance, rental overrides, real estate taxes, repairs and maintenance, up to and including the date that the Franchisor takes physical possession of the Franchised Location.
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, Southern Steer assumes no responsibility for the franchisee's outstanding debts or overdue payments to any individual or entity, including the landlord. However, Southern Steer will protect the franchisee from any obligations to the landlord, such as rental payments, that arise from the use of the franchised location after Southern Steer takes possession.
The franchisee is responsible for settling all debts to the landlord and other parties under the lease, including rent, common area maintenance, insurance, rental overrides, real estate taxes, and repairs, up to the date Southern Steer takes possession of the location. The franchisee is also required to protect Southern Steer from any claims or damages related to Southern Steer's exercise of its rights under the assignment, with the exception of rental payments and other obligations to the landlord that arise from Southern Steer's use of the location after taking possession.
To ensure the enforceability of these provisions, the franchisee must obtain the landlord's written consent to the terms outlined in the agreement. This consent should be documented using the form attached as Attachment F to the Franchise Agreement. Southern Steer retains the right to assign its interest in the lease to any person or entity by providing written notice to both the franchisee and the landlord, without requiring their consent. This assignment is considered valid and binding on both parties.