Does the Bft franchise agreement create a fiduciary relationship between the Franchisor and the Developer?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Independent Contractor. The only relationship between Franchisor and Developer created by this Agreement is that of independent contractor. The business conducted by Developer 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. Developer is not an affiliate of Franchisor, and 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 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the franchise agreement explicitly states that the relationship between the Franchisor and the Developer is that of an independent contractor. The agreement specifies that the Developer's business operations are separate from those of Bft.
Specifically, the franchise agreement emphasizes that nothing within the agreement should be interpreted as creating a fiduciary relationship between Bft and the Developer. Furthermore, neither party is considered an agent, legal representative, subsidiary, joint venturer, partner, employee, servant, or fiduciary of the other for any purpose. This clarifies that the Developer does not have the authority to act on behalf of Bft in any manner that would create obligations or indebtedness binding upon Bft.
This delineation is a standard practice in franchising to ensure that franchisees operate independently and are responsible for their own business conduct. It also means that Bft is not responsible for the actions or omissions of the Developer, their agents, servants, or employees. This arrangement protects both parties from potential liabilities arising from the other's operations and ensures clarity in their respective roles and responsibilities.