What section of the Southern Steer FDD details the payment of costs and expenses related to indemnification?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
13. INDEMNIFICATION
- Scope The Franchisor and its Affiliates and their respective employees, Executive Management, Owners, directors, officers, attorneys, accountants and agents (individually and collectively, the "Franchisor Indemnified Parties") will not be obligated to any person or Entity for any Damages arising out of, from, in connection with, relating to, or as a result of the Multi-Unit Developer's and/or Controlled Entity's (if any) negligence, the Multi-Unit Developer's and/or Controlled Entity's (if any) wrongdoing, breach of this Agreement, or the operation of the and/or Controlled Entity's (if any) Southern Steer Businesses.
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 Southern Steer's 2025 Franchise Disclosure Document, Item 13, titled "Indemnification," outlines the responsibilities of the Multi-Unit Developer and Controlled Entity regarding costs and expenses related to indemnification. This section specifies that the Multi-Unit Developer and Controlled Entity will indemnify and hold harmless the Franchisor Indemnified Parties against any Damages. They will also reimburse the Franchisor Indemnified Parties for all Damages incurred in the defense of or as a result of any Claim brought against them. These claims must arise from the Multi-Unit Developer's or Controlled Entity's negligence, wrongdoing, breach of the agreement, or the operation of their Southern Steer Businesses.
This means that as a Southern Steer franchisee, you could be responsible for covering the legal costs and any damages awarded if a claim is brought against Southern Steer due to your actions or the way you run your business. This includes situations involving negligence, misconduct, or failure to comply with the franchise agreement. The franchisee's indemnification extends to any personal injury, property damage, commercial loss, or environmental contamination resulting from the franchisee's actions or those of their employees and representatives. It also covers any failure to comply with federal or state laws, rules, or regulations.
This indemnification clause is a standard practice in franchising, designed to protect the franchisor from liabilities arising from the franchisee's operations. However, it places a significant financial responsibility on the franchisee. It is crucial for prospective Southern Steer franchisees to fully understand the scope of this indemnification and to secure adequate insurance coverage to mitigate potential risks. Franchisees should consult with a legal and financial advisor to assess their ability to meet these obligations and to ensure they have appropriate risk management strategies in place.