What rights does the Depository have regarding debits from the Southern Steer franchisee's account?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Depository (the franchisee's bank) is authorized to honor and charge the franchisee's account for checks, drafts, orders, and electronic debits payable to Southern Steer Franchising International, LLC. The Depository's rights regarding these debits are the same as if the franchisee had personally drawn and signed a check.
The Depository assumes no liability if a debit is not honored, regardless of the reason. The franchisee (Depositor) agrees to indemnify the Depository from any losses resulting from any debit, including costs and expenses related to checks or orders purporting to be authorized by Southern Steer. The franchisee also indemnifies both Southern Steer and the Depository for losses if a debit is dishonored, regardless of the cause.
The franchisee is responsible for defending any legal actions arising from the Depository's or Southern Steer's actions related to this debit authorization. This authorization remains in effect until the Depository and Southern Steer receive at least 30 days' written notice of termination from the franchisee. This arrangement allows Southern Steer to directly debit the franchisee's account for fees and other payments, streamlining the payment process.