Does the Bee Organized agreement create a fiduciary relationship between the franchisor and franchisee?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement does not create a fiduciary relationship between Franchisor and Franchise, Franchisor and Franchisee are independent contractors, and nothing in this Agreement is intended to make either party a general or special agent, legal representative, subsidiary, joint venturer, partner, employee or servant of the other for any purpose. The parties' relationship is strictly a Franchisor and Franchisee relationship. Franchisee is the sole employer of the employees of the Franchised Business. Franchisee has the sole right to select, hire and discharge Franchisee's employees. Franchisee is responsible for all decisions regarding hiring, firing, training, supervising, disciplining, scheduling and paying wages to, and withholding and paying taxes for Franchisee's employees. Franchisee, each Owner, each Spouse, and Franchisee's officers, directors, manager, agents, representatives, independent contractors and employees shall not be construed, considered, or represented as Franchisor's employees, representatives, or agents. There is no joint employer relationship between Franchisor and Franchisee or Franchisee's employees. Franchisee's compliance with all federal, state and local labor laws rules and regulations shall be exclusively determined and managed by Franchisee. To the extent that the Operations Manual includes information, specifications, procedures, criteria and/or requirements as to employees of the Franchised Business, such requirements shall be interpreted exclusively for the purpose of maintaining brand standards associated with the System, to protect the good will associated with the System, and to ensure System uniformity requirements and standards concerning the Approved Services and Products, and under no circumstance shall same relate to the employer-employee relationship. As to the foregoing issue of "joint employer" and the non-existence thereof, in the event of any inconsistency or conflict between this Agreement and the Operations Manual, the terms of this Agreement shall take precedence and govern.
Source: Item 23 — RECEIPTS (FDD pages 54–218)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, the franchise agreement explicitly states that it does not create a fiduciary relationship between the franchisor and the franchisee. Instead, Bee Organized and its franchisees are considered independent contractors. This means that neither party is considered a legal representative, agent, employee, or partner of the other for any purpose. The relationship is strictly that of franchisor and franchisee.
This distinction has important implications for prospective franchisees. Because there is no fiduciary duty, Bee Organized does not have to put the franchisee's interests ahead of its own. Franchisees are responsible for their own business decisions, including hiring, firing, training, and managing their employees, and ensuring compliance with labor laws. Bee Organized's Operations Manual provides guidelines, but these are primarily to maintain brand standards and system uniformity, not to dictate employment practices.
This arrangement is typical in the franchise industry, where franchisors and franchisees operate as separate entities. The franchisee is responsible for the day-to-day operations of their business, while the franchisor provides the brand, system, and support. The absence of a fiduciary relationship reflects this independent dynamic, where each party is responsible for their own business outcomes and legal compliance.