Does the Annex Brands franchise agreement create a fiduciary relationship between the franchisee and franchisor?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
7. RELATIONSHIP OF THE PARTIES; INDEMNIFICATION
A. RELATIONSHIP OF THE PARTIES.
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- Under this Agreement, Franchisee is an independent contractor with entire control and direction of the Center, subject only to the terms of this Agreement and its attachments.
This Agreement is not intended to, and does not create a fiduciary or other special relationship between the parties, or make any party a principal, agent, legal representative, parent, affiliate, subsidiary, joint venturer, partner, employer, joint employer, employee or servant of any other party for any purpose.
In that regard:
a) Franchisor has no right or duty to operate the Center, and disclaims any liability under this Agreement for any damages arising out of the operation of the Center.
b) Except as provided in this Agreement, Franchisee is solely responsible for training its personnel.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 FDD, the Annex Brands franchise agreement explicitly states that it does not create a fiduciary relationship between the franchisor and the franchisee. The agreement specifies that the franchisee operates as an independent contractor with control and direction of their Center, subject to the terms outlined in the agreement. This arrangement is typical in franchising, where franchisees are generally considered independent business owners rather than agents or legal representatives of the franchisor.
This distinction is important because it clarifies the legal responsibilities and liabilities of each party. Annex Brands, as the franchisor, disclaims any liability for damages arising from the franchisee's operation of the Center. The franchisee is responsible for training their personnel, except as otherwise provided in the agreement. This reinforces the independent contractor status and the franchisee's autonomy in managing their business.
Prospective Annex Brands franchisees should understand that this independent contractor relationship means they are responsible for the success or failure of their business, within the guidelines set by the franchise agreement. They should carefully review the agreement to understand their obligations and responsibilities, as well as the support and training provided by Annex Brands. Understanding this relationship is crucial for making an informed decision about investing in an Annex Brands franchise.