Is Aplus Franchisor liable to the Franchisee for the brand standards designated for the operation of the Franchised Business under the System?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
agent, or independent contractor, and not Franchisor's employee, agent, or independent contractor. Franchisee also agrees that Franchisee is exclusively responsible for the terms and conditions of employment of Franchisee's employees, including recruiting, hiring, firing, training, compensation, work hours and schedules, work assignments, safety and security, discipline, and supervision. Franchisee agrees to manage the employment functions of Franchisee's Store in compliance with federal, state, and local employment laws.
21.2. Standard of Care
This Agreement does not establish a fiduciary relationship between the parties. Unless otherwise specifically provided in this Agreement with respect to certain issues, whenever this Agreement requires Franchisee to obtain Franchisor's written consent or permits Franchisee to take any action or refrain from taking any action, Franchisor is free to act in its own self-interest without any obligation to act reasonably, to consider the impact on Franchisee or to act subject to any other standard of care limiting Franchisor's right, except as may be provided by statute or regulation.
21.3. Indemnification
Franchisee shall defend, indemnify and hold Franchisor and its affiliates, subsidiaries and parents, and their respective officers, directors, managers, members, partners, shareholders, independent contractors and employees (the "Indemnified Parties") harmless from all fines, suits, proceedings, claims, demands, liabilities, injuries, damages, expenses, obligations or actions of any kind (including costs and reasonable attorneys' fees) arising in whole or in part from Franchisee's ownership, operation, or occupation of the Franchised Business and APLUS Store, performance or breach of its obligations under this Agreement, failure to meet Franchisor requirements and System standards, breach of any warranty or representation in this Agreement or from the acts or omissions of Franchisee, its employees or agents, including its advertising of the Franchised Business, except as otherwise provided in this Agreement. Franchisor and any Indemnified Party shall promptly give Franchisee written notice of any claim for indemnification under this Section 21.3.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to the 2024 Aplus Franchise Disclosure Document, Aplus is generally not held to a standard of care that would make them liable to the franchisee regarding brand standards, unless explicitly stated otherwise in the agreement or required by law. Aplus is allowed to act in its own self-interest without obligation to act reasonably or consider the impact on the franchisee.
However, the franchisee is required to operate their Aplus store in a manner that clearly identifies and advertises it as an Aplus store, using the trademarks and other marks as prescribed by Aplus. The franchisee must adhere to all trademark, trade name, service mark, and copyright notice marking requirements. The franchisee is also expected to maintain full, complete, and accurate books, records, and accounts in accordance with the standard accounting system prescribed by Aplus in the manual or in writing.
Furthermore, the franchisee is responsible for defending, indemnifying, and holding Aplus harmless from liabilities arising from the franchisee's operation of the Aplus store, failure to meet Aplus requirements and system standards, or from the acts or omissions of the franchisee, its employees, or agents. This includes the franchisee's advertising of the franchised business. Aplus retains the right to control litigation and defend claims affecting its interests.