Does the 7 Brew franchise agreement create a fiduciary relationship between the franchisee and the franchisor?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
We and you may not make any express or implied agreements, warranties, guarantees, or representations, or incur any debt, in the name or on behalf of the other or represent that our relationship with you is other than franchisor and franchisee. We will not be obligated for any damages to any person or property directly or indirectly arising from the Store's operation or the business you conduct under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the 7 Brew franchise agreement does not establish a fiduciary relationship between the franchisor and the franchisee. The agreement explicitly states that neither party can represent their relationship as anything other than franchisor and franchisee. This means 7 Brew is not obligated to act in the franchisee's best interest in the same way a fiduciary would be. Franchisees operate as independent business owners, and 7 Brew is not liable for damages arising from the store's operation.
This arrangement is typical in franchising, where the franchisor provides a system and brand, and the franchisee manages the day-to-day operations. The franchisee is responsible for their own business decisions and bears the risks and rewards of their efforts. 7 Brew maintains control over brand standards and the overall system, but franchisees are responsible for managing their employees and store operations.
Prospective franchisees should understand that this lack of a fiduciary relationship means they need to conduct their own due diligence and seek independent advice before investing in a 7 Brew franchise. They should carefully review the franchise agreement and consider consulting with an attorney or financial advisor to fully understand their rights and obligations.