Does the Browns Chicken franchise agreement create a fiduciary relationship between Brown and the franchisee?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties acknowledge and agree that Brown and Franchisee are independent contractors, and that this Agreement does not create a fiduciary relationship between them. Franchisee shall conspicuously identify itself on the Premises of the Store and in all dealings with customers and suppliers as the owner of the Store under a Franchise granted from Brown and shall place such notices of independent ownership on such forms, business cards, stationery, advertising and other materials as Brown may require from time to time. Franchisee acknowledges that Brown's training, guidance, advice and assistance, Franchisee's obligations under this Agreement and the standards, specifications, policies and procedures required by Brown hereunder and in the Operating Manual are imposed not for the purpose of exercising control over Franchisee, but rather for the limited purpose of protecting the Marks and confidential information, goodwill and brand consistency.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the franchise agreement explicitly states that it does not create a fiduciary relationship between Browns Chicken and the franchisee. The agreement specifies that Browns Chicken and the franchisee are independent contractors.
This means that Browns Chicken does not have a legal obligation to act in the best interest of the franchisee, which is a common characteristic of a fiduciary relationship. The agreement emphasizes that Browns Chicken's training, guidance, advice, and the required standards and procedures are in place to protect the Browns Chicken brand, trademarks, confidential information, and goodwill, rather than to exert control over the franchisee's business operations.
As an independent contractor, the franchisee is responsible for the operation of their Browns Chicken store and is liable for any damages arising from their business. The franchisee must also identify themselves as the owner of the store operating under a franchise from Browns Chicken, reinforcing the independent nature of the relationship. This arrangement is typical in franchising, where the franchisor sets standards and provides support, but the franchisee operates the business independently.