Does the Baya Bar agreement constitute a partnership between the Developer and 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 agreement between the Developer and Franchisor does not constitute a partnership. The agreement explicitly states that the Developer is an independent licensee and that no partnership exists between them and Baya Bar. This is a standard clause in franchise agreements to clarify the relationship between the parties.
Furthermore, the agreement specifies that the Developer is not an agent, legal representative, or employee of Baya Bar for any purpose. The Developer has no right or authority to assume or create any obligation on behalf of Baya Bar, nor can they bind Baya Bar in any way. The Developer also agrees not to incur any debt or obligation on behalf of Baya Bar or take any action that could adversely affect Baya Bar's rights or be detrimental to Baya Bar or its other developers or franchisees.
To further protect Baya Bar, the Developer agrees to indemnify Baya Bar and hold it harmless from any liability, loss, attorney's fees, or damage that Baya Bar may suffer as a result of claims, demands, taxes, costs, or judgments arising out of the established relationship. This includes costs related to the transfer of development rights, defaults under leases, receipt of revenues, or any other relationships arising directly or indirectly from the development and operation of Baya Bar outlets. This clause reinforces the independent nature of the Developer's business and ensures they are responsible for their own actions and liabilities.