Does the Anago franchise agreement create a fiduciary relationship between the franchisor and franchisee?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties agree that this Agreement does not create a fiduciary relationship between them. You are an independent contractor and unless expressly provided to the contrary, nothing in this Agreement is intended to designate either party an agent, legal representative, subsidiary, joint venture, partner, employee, Affiliate or servant of the other party for any purpose, and nothing herein is intended to make Us an employer or co-employer of Your employees, any such relationship being expressly disclaimed. The parties agree that nothing in this Agreement authorizes You to make any Agreement, warranty or representation for Us, nor to incur any debt or other obligation in Our name. Any misrepresentations of the Anago System contract specifications by You will void any contract entered into with the Client.
Franchisor does not owe any fiduciary obligation to Subfranchisor or Unit Franchisees for administering the Fund or any other reason.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the franchise agreement explicitly states that it does not create a fiduciary relationship between the franchisor and the franchisee. The agreement establishes the franchisee as an independent contractor, clarifying that neither party is an agent, legal representative, subsidiary, joint venture, partner, employee, or servant of the other. This distinction is crucial as it defines the legal and financial responsibilities of each party.
This independent contractor status means that Anago franchisees are responsible for their own business decisions and operations, without direct control from the franchisor. While Anago may provide assistance and services, the franchisee is ultimately in charge of how they perform their work and manage their business. This arrangement also means that Anago is not liable for the franchisee's debts, obligations, or actions, reinforcing the arms-length nature of the relationship.
Furthermore, the FDD states that Anago does not owe any fiduciary obligation to Subfranchisor or Unit Franchisees for administering the Fund or any other reason. This reinforces the lack of a fiduciary duty, particularly in the context of the advertising fund, where Anago has sole discretion over the fund's activities and is not obligated to ensure direct benefits to each franchisee in proportion to their contributions. This is a common arrangement in franchising, but it's important for prospective franchisees to understand that the franchisor's decisions regarding the advertising fund are not subject to fiduciary standards.