Must an Aunt Millies Bakeries franchisee comply with federal laws concerning their relationship with employees?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
applicable payroll-related taxes with respect to any employees of DISTRIBUTOR. DISTRIBUTOR in all events shall be and remain responsible for insuring that all persons engaged by DISTRIBUTOR comply fully with all the terms and conditions of this Agreement. Any breach of this Agreement by any person engaged by DISTRIBUTOR shall be deemed to be a breach by DISTRIBUTOR.
§2.3 INDEPENDENT CONTRACTORS: 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 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 31)
What This Means (2025 FDD)
According to the 2025 Aunt Millies Bakeries FDD, franchisees are responsible for ensuring that anyone they engage complies with the terms of their Distribution Agreement. Specifically, the franchisee is responsible for applicable payroll-related taxes for any of their employees.
As an independent contractor, the Aunt Millie's Bakeries franchisee has the right to operate their business as they choose and bears all the risks and costs of operating the business. The franchisee has no authority to retain any person on behalf of Aunt Millie's Bakeries.
Furthermore, the FDD states that the franchisee has no claim to any benefits or other compensation currently paid by Aunt Millie's Bakeries to employees. The agreement emphasizes that the relationship between Aunt Millie's Bakeries and its franchisees is not a fiduciary one.