What is the purpose of the Southern Steer Authorization to Honor Electronic Funds Transfers?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
ATTACHMENT D AUTHORIZATION TO HONOR ELECTRONIC FUNDS TRANSFERS
PAYEE: SOUTHERN STEER FRANCHISING INTERNATIONAL, LLC BANK NAME: ACCOUNT NO.:
The undersigned Depositor hereby authorizes and requests the Depository designated below to honor and to charge to the following designated account, checks, drafts, orders and electronic debits (collectively "debits") drawn on such account which are payable to the above-named Payee. It is agreed that the Depository's rights with respect to each such debit will be the same as if it were a check drawn and signed by the Depositor. It is further agreed that if any such debit is not honored, whether with or without cause and whether intentionally or inadvertently, the Depository will be under no liability whatsoever. This authorization will continue in force until the Depository and the Payee have received at least thirty (30) days written notification from the Depositor of its termination.
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 Authorization to Honor Electronic Funds Transfers (EFT) serves to authorize Southern Steer Franchising International, LLC to electronically debit funds from the franchisee's designated bank account. This authorization allows Southern Steer to collect payments, such as franchise fees, royalties, and other amounts owed, directly from the franchisee's account. The franchisee agrees that Southern Steer has the same rights regarding each debit as if it were a check signed by the franchisee.
This agreement remains in effect until both the depository (bank) and Southern Steer receive at least 30 days' written notice of termination from the franchisee. This ensures that Southern Steer has ample time to adjust its payment collection methods and avoid any disruptions in receiving payments. The franchisee is responsible for notifying both parties to effectively terminate the authorization.
The franchisee also agrees to indemnify both the depository and Southern Steer against any losses or actions arising from the electronic debits. This includes covering any costs or expenses related to debits, even if they are not honored, whether intentionally or unintentionally. The franchisee is responsible for defending any legal actions brought by third parties due to actions taken by the depository or Southern Steer under this authorization. This section places a significant responsibility on the franchisee to cover potential liabilities associated with the EFT process.
In essence, the Authorization to Honor Electronic Funds Transfers streamlines the payment process between the franchisee and Southern Steer, ensuring timely and consistent collection of fees. However, it also places certain responsibilities and liabilities on the franchisee, including indemnifying the depository and Southern Steer against potential losses and legal actions. Prospective franchisees should carefully review this authorization and understand their obligations before signing.