What are the specific obligations of a Southern Steer franchisee (Item 9) regarding the maintenance of insurance coverage, as outlined in the Franchise Agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
sent, at any time or times, effective immediately upon notice to Franchisee. Each of the foregoing covenants is to be construed as severable and independent and is intended to protect Franchisor, its Affiliates, and their successors and assigns and may be enforced by any of them.
- 16.10. Independent Obligation. The obligations set out in this Section 16 are independent of any obligation of Franchisor under this Agreement.
17. INSURANCE; INDEMNIFICATION
17.1. Franchisee's Insurance.
(a) Insurance Policies. The Franchisee must, at its expense, procure and maintain in full force and effect insurance policies, in such amounts and on such terms, as prescribed below or by the Franchisor in the Brand Manual, by an insurance company which is acceptable to and approved by the Franchisor at all times during the Initial Term of this Agreement and any Interim Period, licensed in the state where coverage is provided, and carries an A.M. Best rating of at least A-VII. The Franchisee must obtain such policies before opening the Southern Steer Business. The Franchisee must also procure and pay for all other insurance required by state or federal law, including, without limitation, workers' compensation and unemployment insurance. Nothing in this Agreement will prevent the Franchisee from purchasing insurance with coverage amounts in excess of the coverage amounts required by the Franchisor.
- (b) Coverage. Insurance policies must insure the Franchisee, the Franchisor, and their respective Affiliates, officers, stockholders, directors, and all other parties designated by the Franchisor, as additional named insureds against any liability that may accrue against them by reason of the ownership, maintenance or operation by Franchisee of the Southern Steer Business.
- (c) Requirements. The policies must also stipulate that the Franchisor will receive a 30-day prior written notice of cancellation, non-renewal, or elimination, and must contain endorsements by the insurance companies waiving all rights of subrogation against the Franchisor. Original or duplicate copies of all insurance policies, certificates of insurance, or other proof of insurance acceptable to the Franchisor, including original endorsements affecting the coverage required by this Section, must be furnished to the Franchisor by the Franchisee, together with proof of payment, prior to the opening of the Southern Steer Business. The Franchisee will also furnish the Franchisor with certificates and endorsements evidencing such insurance coverage within 10 days after each of the following events: (i) at all policy renewal periods, no less often than annually, and (ii) at all instances of any change to, addition to, or replacement of any insurance.
What This Means (2025 FDD)
According to the 2025 Southern Steer Franchise Disclosure Document, franchisees are obligated to procure and maintain insurance policies throughout the Initial Term of the Franchise Agreement and any Interim Period. These policies must be obtained at the franchisee's expense from an insurance company acceptable to Southern Steer, licensed in the state where coverage is provided, and holding an A.M. Best rating of at least A-VII. The franchisee must secure these policies before opening their Southern Steer Business. Additionally, franchisees must obtain and pay for all other insurance required by state or federal law, including workers' compensation and unemployment insurance.
The required insurance policies must cover the franchisee, Southern Steer, their respective affiliates, officers, stockholders, directors, and any other parties designated by Southern Steer as additional named insureds. This coverage protects against any liability that may arise due to the ownership, maintenance, or operation of the Southern Steer Business.
Southern Steer franchisees must ensure that their insurance policies stipulate that Southern Steer will receive a 30-day prior written notice of cancellation, non-renewal, or elimination of coverage. The policies must also include endorsements by the insurance companies waiving all rights of subrogation against Southern Steer. Franchisees are required to furnish Southern Steer with original or duplicate copies of all insurance policies, certificates of insurance, or other acceptable proof of insurance, including original endorsements, along with proof of payment, before opening their Southern Steer Business.
If a Southern Steer franchisee fails to maintain the required insurance coverage, Southern Steer has the right to procure the insurance and charge the franchisee for the costs, including a reasonable fee for expenses incurred during procurement. This charge is payable immediately upon notice. Southern Steer also makes no representations or warranties that the required minimum insurance is adequate to protect the franchisee and Southern Steer.