Does the Baya Bar agreement allow the Developer to create obligations on behalf of the Franchisor?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.1 Independent Licensee. Developer is and shall be an independent licensee under this Agreement, and no partnership shall exist between Developer and Franchisor. This Agreement does not constitute Developer as an agent, legal representative, or employee of Franchisor for any purpose whatsoever, and Developer is not granted any right or authority to assume or create any obligation for or on behalf of, or in the name of, or in any way to bind Franchisor. Developer agrees not to incur or contract any debt or obligation on behalf of Franchisor or commit any act, make any representation or advertise in any manner which may adversely affect any right of Franchisor or be detrimental to Franchisor or other developers or franchisees of Franchisor. Pursuant to the above, Developer agrees to indemnify Franchisor and hold Franchisor harmless from any and all liability, loss, attorney's fees, or damage Franchisor may suffer as a result of claims, demands, taxes, costs or judgments against Franchisor arising out of the relationship hereby established which specifically, but not exclusively, includes costs, losses, expenses, attorneys fees relative to assignment or the transfer of right to develop and transactional costs relative thereto, defaults under any leases, subleases, notes, receipt of revenues or any other relationships arising directly or indirectly out of the development and operation of the Baya Bar outlets.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the Developer is explicitly prohibited from creating any obligations on behalf of the Franchisor. The agreement specifies that the Developer acts as an independent licensee and not as an agent, legal representative, or employee of Baya Bar for any purpose.
This means a Baya Bar Developer cannot assume or create any debt, obligation, or liability for Baya Bar. The Developer also cannot make any representations or advertise in a way that could negatively affect Baya Bar's rights or be detrimental to the brand, other developers, or franchisees.
To further protect Baya Bar, the Developer agrees to indemnify and hold Baya Bar harmless from any liability, loss, attorney's fees, or damages resulting from claims, demands, taxes, costs, or judgments against Baya Bar that arise from the established relationship. This includes costs related to the transfer of development rights, defaults under leases, revenue receipts, or any other relationships stemming from the development and operation of Baya Bar outlets. This clause reinforces the independent nature of the Developer's role and ensures they are responsible for their own actions and liabilities.