Does a fiduciary relationship exist between Aunt Millies Bakeries and the distributor?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties intend to create an independent contractor relationship and it is of the essence of this Agreement that DISTRIBUTOR be an independent contractor for all purposes and DISTRIBUTOR shall only identify himself as such in all third party dealings. Any contrary final determination by any board, tribunal or court of competent jurisdiction shall require the amendment of this Agreement in any way necessary to establish an independent contractor relationship. As an independent contractor, DISTRIBUTOR has the right to operate the business as DISTRIBUTOR chooses, and shall bear all risks and costs of operating such business. DISTRIBUTOR has no authority to retain any person on behalf of AUNT MILLIE'S. It is expressly understood that DISTRIBUTOR has no claim, or right under any circumstances, to any benefits or other compensation currently paid by AUNT MILLIE'S to employees, or hereafter declared by AUNT MILLIE'S for the benefit of employees. No fiduciary relationship exists between the parties.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, the agreement explicitly states that no fiduciary relationship exists between the parties. The agreement specifies that the distributor is an independent contractor for all purposes. This means the distributor operates their business as they choose and bears all the risks and costs associated with it.
As an independent contractor, the distributor has the right to operate the business as they see fit and is responsible for all risks and costs. The distributor cannot retain anyone on behalf of Aunt Millies Bakeries and has no claim to any employee benefits offered by Aunt Millies Bakeries.
This independent contractor relationship is a key aspect of the agreement, ensuring the distributor's autonomy while also clarifying that Aunt Millies Bakeries is not responsible for the distributor's business decisions or liabilities. This arrangement is typical in many franchise systems, where franchisees or distributors operate independently under the franchisor's brand and system.