Is a Baya Bar franchisee considered an employee of the franchisor under the franchise agreement?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.6 Indemnification. TO THE FULLEST EXTENT PERMITTED BY LAW, FRANCHISEE AGREES TO EXONERATE AND INDEMNIFY AND HOLD HARMLESS BAYA BAR FRANCHISE SYSTEMS, LLC, BAYA BAR, LLC, AND ANY OF THESE COMPANIES' PARENT COMPANY, SUBSIDIARIES, DIVISIONS, AFFILIATES, SUCCESSORS, ASSIGNS AND DESIGNEES AS WELL AS THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SHAREHOLDERS, SUCCESSORS, DESIGNEES AND REPRESENTATIVES (COLLECTIVELY REFERRED TO AS THE "BAYA BAR INDEMNITEES"), FROM ALL CLAIMS BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATED TO FRANCHISEE'S FRANCHISE AND/OR THE OPERATION THEREOF, INCLUDING BUT NOT LIMITED TO, ANY CLAIM IN CONNECTION WITH FRANCHISEE'S EMPLOYEES OR AGENTS; FRANCHISEE'S COMPUTER SYSTEMS; FRANCHISEE'S PREPARATION, STORAGE, HANDLING AND/OR DISPOSAL OF FOOD OR BEVERAGE PRODUCTS; THE FRANCHISED BUSINESS PREMISES; OR FRANCHISEE'S ADVERTISING OR BUSINESS PRACTICES. FRANCHISEE AGREES TO PAY FOR ALL BAYA BAR INDEMNITEES' LOSSES, EXPENSES (INCLUDING, BUT NOT LIMITED TO ATTORNEYS' FEES) OR CONCURRENT OR CONTRIBUTING LIABILITY INCURRED IN CONNECTION WITH ANY ACTION, SUIT, PROCEEDING, INQUIRY (REGARDLESS OF WHETHER THE SAME IS REDUCED TO JUDGMENT OR DETERMINATION), OR ANY SETTLEMENT THEREOF FOR THE INDEMNIFICATION GRANTED BY FRANCHISEE HEREUNDER. THE BAYA BAR INDEMNITEES SHALL HAVE THE RIGHT TO SELECT AND APPOINT INDEPENDENT COUNSEL TO REPRESENT ANY OF THE BAYA BAR INDEMNITEES IN ANY ACTION OR PROCEEDING COVERED BY THIS INDEMNITY. FRANCHISEE AGREES THAT TO HOLD THE BAYA BAR INDEMNITEES HARMLESS, FRANCHISEE WILL REIMBURSE THE BAYA BAR INDEMNITEES AS THE COSTS AND EXPENSES ARE INCURRED BY THE BAYA BAR INDEMNITEES.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
The 2024 Baya Bar Franchise Disclosure Document does not explicitly state that a franchisee is considered an employee of the franchisor. However, the document does include a section regarding indemnification.
According to the FDD, the franchisee agrees to exonerate, indemnify, and hold harmless Baya Bar Franchise Systems, LLC from all claims related to the franchisee's franchise and its operation. This includes claims connected with the franchisee's employees or agents, computer systems, food and beverage handling, the franchised business premises, and advertising or business practices. The franchisee is responsible for covering all losses and expenses, including attorney's fees, incurred by Baya Bar in connection with any action or proceeding related to this indemnification.
This indemnification clause suggests that Baya Bar franchisees are considered independent business owners rather than employees. As such, they are responsible for their own business operations and liable for any claims arising from those operations. This is a common arrangement in franchising, where franchisees operate independently under the franchisor's brand and system.