Is there a cure period for a Southern Steer franchisee who fails to maintain required insurance?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
r non-payment of rent or other legal reasons or the Franchisee is evicted from the Franchised Location.
- 20.2. Notice of Termination. If this Agreement is terminated by the Franchisor pursuant to Section 20.1, then the Franchisor will give the Franchisee written notice that this Agreement is terminated and, in that event, the effective date of termination of this Agreement will be the date of the written notice of termination is delivered to the Franchisee in accordance with the notice provision set out in Section 29.
- 20.3. Termination after Failure to Cure. The Franchisee will be deemed to be in Default under this Agreement and the Franchisor has the right to exercise its remedies described in Sections 20.4 and 20.5, including termination of this Agreement and all rights granted under this Agreement if: (i) within 30 days after Franchisor sends the Franchisee written notification setting out the nature of the default ("Notice of Default"); (ii) within any shorter period expressly set forth in the following clauses as to such Default; or (iii) any longer cure period required by applicable law, the Franchisee does not correct the default to Franchisor's satisfaction for any of the following events (for the purposes of this Agreement, an alleged breach of this Agreement by the Franchisee will be deemed to be "corrected" if both the Franchisor and the Franchisee agree in writing that the alleged breach has been corrected):
- (a) the Franchisee has not purchased or leased a site for the Franchised Location within 90 days after the Effective Date of this Agreement;
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
The 2025 Southern Steer Franchise Disclosure Document (FDD) does not explicitly state a specific cure period for failing to maintain the required insurance. However, the FDD does outline general default and termination procedures.
According to the FDD, if a Southern Steer franchisee fails to correct a default to the Franchisor's satisfaction within 30 days after receiving a written Notice of Default, the franchisor has the right to exercise its remedies, including termination of the agreement. The franchisor also has the right to discontinue supplying items upon default. This includes requiring the franchisee to pay C.O.D. or by certified check for goods/services, stopping the sale and/or provision of any goods/services to the franchisee until all defaults are cured, requiring designated suppliers to do the same, suspending performance of all or certain services to the franchisee, and/or suspending the franchisee's right to use the System and Website.
Because the FDD does not specify a cure period for failure to maintain insurance, it is important for a prospective franchisee to seek clarification from Southern Steer regarding the specific cure period or potential consequences related to insurance non-compliance. Understanding the exact terms and conditions related to insurance requirements is crucial for avoiding potential default and ensuring the smooth operation of the franchise.