Is a fiduciary relationship created between Bft Franchisor and Franchisee by the franchise agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
11.1 Independent Contractor. The only relationship between Franchisor and Franchisee created by this Agreement is that of independent contractor. The business conducted by Franchisee is completely separate and apart from any business that may be operated by Franchisor and nothing in this Agreement shall create a fiduciary relationship between them or constitute either Party as agent, legal representative, subsidiary, joint venturer, partner, employee, servant or fiduciary of the other Party for any purpose whatsoever. Franchisee shall hold itself out to the public as an independent contractor operating the business pursuant to a license from Franchisor, and Franchisee agrees to take such action including exhibiting a notice to that effect in such content, form and place as Franchisor may specify. It is further specifically agreed that Franchisee is not an affiliate of Franchisor and that neither Party shall have authority to act for the other in any manner to create any obligations or indebtedness that would be binding upon the other Party. Neither Party shall be in any way responsible for any acts and/or omissions of the other, its agents, servants or employees and no representation to anyone will be made by either Party that would create an implied or apparent agency or other similar relationship by and between the Parties.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the franchise agreement explicitly states that the relationship between Bft and the franchisee is that of an independent contractor. The agreement specifies that it does not create a fiduciary relationship between the parties. This means that Bft and the franchisee do not have a legal obligation to act in each other's best interests, which is a common characteristic of a fiduciary relationship.
This distinction is important for prospective franchisees because it clarifies the legal boundaries of the relationship. Franchisees should understand that Bft is not acting as their fiduciary and they must make their own business decisions independently. This includes managing their studio, hiring employees, and complying with all applicable laws.
The agreement emphasizes that the franchisee is responsible for their own actions and omissions, and that neither party has the authority to act for the other in a way that creates binding obligations. This reinforces the independent contractor status and the absence of a fiduciary duty. Franchisees should seek independent legal advice to fully understand their rights and responsibilities under the franchise agreement.