Must an Aunt Millies Bakeries franchisee comply with local 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.
§4.4 NON-COMPLIANCE: Failure to carry out the obligations listed in this Article or elsewhere in this Agreement shall be considered a breach of this Agreement and shall entitle AUNT MILLIE'S to terminate this Agreement as more specifically set forth in Article 9 hereof, except that DISTRIBUTOR shall not be responsible for failures caused by Force Majeure; provided, however, that an event of Force Majeure shall not excuse DISTRIBUTOR from any obligations to pay for Products pursuant to Article 3.
ARTICLE 2 RELATIONSHIP
- §2.1 EXTENT AND DURATION: AUNT MILLIE'S hereby recognizes DISTRIBUTOR'S ownership of the Distribution Rights, which ownership will continue until the Distribution Rights are sold or transferred as provided herein.
- §2.2 TERMINATION OF THIS AGREEMENT: The parties agree that the Distribution Rights must be exercised in compliance with the terms of this Agreement, and that any termination of this Agreement requires DISTRIBUTOR, or AUNT MILLIE'S for the account of DISTRIBUTOR, to sell such Distribution Rights as provided herein.
- §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.
You must comply with all local, state and federal health and sanitation laws in operating your Aunt Millie's business.
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 Millie's Bakeries FDD, franchisees are considered independent contractors and are responsible for ensuring that anyone they engage complies with the terms of their agreement with Aunt Millie's Bakeries. Any breach of the agreement by someone engaged by the franchisee is considered a breach by the franchisee themselves.
As independent contractors, Aunt Millie's Bakeries franchisees have the right to operate their business as they choose and bear all the risks and costs of doing so. They cannot retain anyone on behalf of Aunt Millie's Bakeries and have no claim to any benefits or compensation paid by Aunt Millie's Bakeries to its employees. The agreement explicitly states that no fiduciary relationship exists between Aunt Millie's Bakeries and its franchisees.
While the FDD specifies the independent contractor relationship, it does not explicitly state that franchisees must comply with local laws concerning their employees. However, the FDD does state that franchisees must comply with all local, state, and federal health and sanitation laws in operating their Aunt Millie's business.
Prospective franchisees should clarify with Aunt Millie's Bakeries the extent to which they are responsible for complying with employment-related laws, given their status as independent contractors who may engage others to assist with their distribution business.