Does the Aw franchise agreement create a fiduciary relationship between the franchisor and franchisee?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.1 Independent Contractor; No Fiduciary Relationship. Both you and we understand and agree that this Agreement does not create a fiduciary relationship between us, that you and we are independent contractors, and that nothing in this Agreement is intended to make either party a general or special agent, joint venturer, partner, or employee of the other for any purpose whatsoever. You agree to conspicuously identify yourself in all your dealings with customers, suppliers, public officials, employees, and others as the owner of the Papa Ray's Pizza Restaurant pursuant to a Franchise Agreement with us, and agree to place any other notices of independent ownership on your forms, business cards, stationery, advertising, and other materials as we may require from time to time.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the franchise agreement explicitly states that it does not create a fiduciary relationship between the franchisor and the franchisee. The agreement specifies that both parties are independent contractors. This means that Aw franchisees are not legally considered agents, partners, or employees of Aw for any purpose. Franchisees must acknowledge this independent relationship in all their dealings.
This distinction is crucial because a fiduciary relationship implies a legal duty of one party to act in the best interest of another, which is not the case in the Aw franchise agreement. Aw emphasizes that its training, guidance, and standards are designed to protect its brand and goodwill, not to exert control over the franchisee's independent operation. The franchisee is solely responsible for managing their Papa Ray's Pizza Restaurant.
Prospective Aw franchisees should understand that this independent contractor status means they have significant autonomy in running their business, but also bear the full responsibility for its success or failure. They are not entitled to the same legal protections or expectations of loyalty that might exist in a fiduciary relationship. This arrangement is typical in franchising, where franchisees operate independently under a licensed brand.