Does the Buff City Soap agreement create a fiduciary relationship between the Franchisor and the Developer?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Independent Contractors. It is understood and agreed by the Parties that this Agreement does not create a fiduciary relationship between them; that Franchisor and Franchisee are and will be independent contractors and that nothing in this Agreement is intended to make either Party a general or special agent, joint venturer, partner or employee of the other for any purpose. Franchisee will conspicuously identify itself in all dealings as the owner of the Makery and the rights granted under the Agreement with Franchisor and will place such notices of independent ownership on such forms, business cards, employment-related documents (e.g. employment applications and agreements, paychecks and benefits notice), stationery and advertising and other materials as Franchisor may periodically require. Franchisee must post a prominent sign in the Makery identifying Franchisee as a Buff City Soap franchisee in a format prescribed by Franchisor, including without limitation an acknowledgment that Franchisee independently owns and operate the Makery, the Marks are owned by Franchisor and that Franchisee's use of such Marks is pursuant to a license issued by Franchisor.
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to the 2025 Buff City Soap Franchise Disclosure Document, the franchise agreement explicitly states that it does not create a fiduciary relationship between the franchisor and the franchisee. The agreement specifies that Buff City Soap and its franchisees are independent contractors. This means that neither party is considered an agent, partner, employee, or joint venturer of the other for any purpose.
Buff City Soap requires franchisees to clearly identify themselves as the owners of their Makery (store) and to acknowledge their independent ownership in all dealings. This includes displaying notices of independent ownership on forms, business cards, employment documents, stationery, advertising, and other materials as required by Buff City Soap. Franchisees must also post a prominent sign in their Makery identifying themselves as a Buff City Soap franchisee, acknowledging that they independently own and operate the Makery, that the trademarks are owned by Buff City Soap, and that their use of such marks is pursuant to a license issued by Buff City Soap.
The explicit denial of a fiduciary relationship is a common practice in franchising. This arrangement ensures that franchisees operate their businesses independently, bearing the risks and reaping the rewards of their own efforts, while adhering to the standards and systems set by Buff City Soap. This independence allows franchisees to make their own business decisions without creating a legal obligation for Buff City Soap to act in their best interests, as would be the case in a fiduciary relationship.