Does the Bambu franchise agreement create a fiduciary relationship between Bambu and the franchisee?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties acknowledge that each of them are independent businesspersons, that their only relationship is by virtue of this Agreement and that no fiduciary relationship is created hereunder.
Neither party is liable or responsible for the other's debts or obligations, nor shall either party be obligated for any damages to any person or property directly or indirectly arising out of the operation of the other party's business authorized by or conducted pursuant to this Agreement.
Neither Bambu nor Franchisee will hold themselves out to be the agent, employer or partner of the other and neither Bambu nor Franchisee has the authority to bind or incur liability on behalf of the other.
All employees hired by or working for Franchisee shall be the employees of Franchisee and shall not, for any purpose, be deemed employees of Bambu or subject to Bambu's control.
Neither this Agreement nor the course of conduct between Bambu and Franchisee is intended, nor may anything in this Agreement (or the course of conduct) be construed, to state or imply that Bambu is the employer of Franchisee's Authorized Representatives, or vice versa.
Each of the parties agrees to file its own tax, regulatory and payroll reports with respect to its respective employees and operations.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the franchise agreement explicitly states that no fiduciary relationship is created between Bambu and its franchisees. The agreement specifies that the parties are independent businesspersons, and their relationship is solely based on the franchise agreement itself. This means that Bambu does not owe the franchisee the heightened duties of care and loyalty that are characteristic of a fiduciary relationship.
This provision clarifies the legal standing of the franchisee as an independent entity. The agreement also states that neither party is liable or responsible for the other's debts or obligations, further emphasizing the arms-length nature of their relationship. This independence extends to employment matters, as all employees hired by the franchisee are deemed employees of the franchisee, not of Bambu, and are not subject to Bambu's control.
This explicit disclaimer of a fiduciary relationship is a common practice in franchising. It protects Bambu from potential legal claims that could arise if such a relationship were deemed to exist. Franchisees should understand that while Bambu provides a system and brand, they are ultimately responsible for their own business operations and liabilities. Franchisees should seek legal counsel to fully understand their rights and responsibilities under the franchise agreement.