Does the Beef O Bradys agreement create a fiduciary relationship between the franchisor and franchisee?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
18.1 Independent Contractors. You and we understand and agree that this Agreement does not create a fiduciary relationship between you and us, that we and you are and will be independent contractors and that nothing in this Agreement is intended to make either you or us a general or special agent, joint venturer, partner or employee of the other for any purpose. You agree to conspicuously identify yourself in all dealings with customers, suppliers, public officials, Family Sports Pub personnel and others as the owner of the Family Sports Pub under a franchise we have granted and to place such notices of independent ownership on such forms, business cards, stationery and advertising and other materials as we may require from time to time. If you do not do so, we may place the notices and accomplish the foregoing as we see fit, and you must reimburse us for doing so.
Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
According to the 2025 Beef O Bradys Franchise Disclosure Document, the franchise agreement explicitly states that it does not create a fiduciary relationship between Beef O Bradys and the franchisee. The agreement specifies that both parties are independent contractors. This means that neither Beef O Bradys nor the franchisee is considered an agent, partner, joint venturer, or employee of the other for any purpose.
This distinction is important because it clarifies the legal and financial responsibilities of each party. As independent contractors, franchisees are responsible for their own business operations, including managing personnel, paying taxes, and ensuring compliance with local regulations. Beef O Bradys is not liable for the franchisee's debts, obligations, or any damages arising from the operation of the Family Sports Pub.
The agreement also requires franchisees to clearly identify themselves as the owners of the Family Sports Pub operating under a franchise granted by Beef O Bradys. This includes placing notices of independent ownership on forms, business cards, stationery, advertising, and other materials as required by Beef O Bradys. If a franchisee fails to do so, Beef O Bradys has the right to place the notices themselves and be reimbursed by the franchisee for the associated costs. This provision reinforces the independent nature of the franchise relationship and prevents any misrepresentation of the franchisee as an agent or employee of Beef O Bradys.