Is Bombs Away Franchising liable for the franchisee's obligations to third parties?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.1 Relationship of the Parties. The parties are independent contractors, and neither is the agent, partner, joint venturer, or employee of the other. Bombs Away Franchising is not a fiduciary of Franchisee. Bombs Away Franchising does not control or have the right to control Franchisee or its Business. Any required specifications and standards in this Agreement and in the System Standards exist to protect Bombs Away Franchising's interest in the System and the Marks, and the goodwill established in them, and not for the purpose of establishing any control, or duty to take control, over the Business. Bombs Away Franchising has no liability for Franchisee's obligations to any third party whatsoever.
- 18.2 No Third-Party Beneficiaries. This Agreement does not confer any rights or remedies upon any person or entity other than Franchisee, Bombs Away Franchising, and Bombs Away Franchising's affiliates.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away Franchising is not liable for the franchisee's obligations to any third party whatsoever. The franchise agreement specifies that the franchisee and Bombs Away Franchising are independent contractors. This means that neither party is the agent, partner, joint venturer, or employee of the other. Bombs Away Franchising explicitly states it is not a fiduciary of the franchisee and does not control the franchisee's business operations.
Any specifications and standards outlined in the franchise agreement and System Standards are designed to protect Bombs Away Franchising's interest in the System, Marks, and associated goodwill. These standards are not intended to establish control over the franchisee's business. This reinforces the independent contractor relationship and limits Bombs Away Franchising's liability.
The franchise agreement also states that it does not confer any rights or remedies upon any person or entity other than the franchisee, Bombs Away Franchising, and Bombs Away Franchising's affiliates. This further clarifies that third parties do not have any standing to make claims against Bombs Away Franchising based on the franchise agreement. This provision is common in franchise agreements to protect the franchisor from being held responsible for the actions or debts of its franchisees.