Who is considered the employer of the employees hired by a Buns On Fire franchisee?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
13.4 Identification of Independent Ownership
In all public records and prominently displayed at the Franchised Business and in Franchisee's relationship with third parties, including but not limited to, employees and vendors, as well as on letterheads and business forms, Franchisee shall indicate clearly the independent ownership of the Franchised Business, and that the operations of same are separate and distinct from the operation of Franchisor's business. Franchisor shall have the absolute right to approve and/or supply any sign displays containing the foregoing.
13.5 Taxes
The Franchisor shall have no liability for any sales, use, excise, gross receipts, property or other taxes, whether levied upon Franchisee, the Franchised Business or its assets, or upon Franchisor in connection with sales made, services performed or business conducted by Franchisee, except for any taxes Franchisor is required by law to collect from Franchisee with respect to purchases from Franchisor or for Franchisor's own income tax liability.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, the franchisee is responsible for indicating independent ownership of their franchised business. Specifically, in relationships with third parties, including employees, the franchisee must clearly state that the business is independently owned and operated, separate from Buns On Fire's operations. This means the franchisee is considered the employer of their employees.
This delineation of responsibility has several implications for a prospective Buns On Fire franchisee. As the employer, the franchisee is responsible for all aspects of employment, including hiring, training, compensation, and compliance with labor laws. They must handle employee-related issues and ensure their business is distinct from the franchisor in the eyes of employees and vendors.
This arrangement is typical in franchising, where franchisees operate as independent business owners. While Buns On Fire provides the brand, system, and support, the franchisee manages the day-to-day operations and bears the direct responsibility for their employees. This independence allows franchisees to tailor their management style to their local market and business needs, but it also requires them to have a strong understanding of employment law and human resources practices.
Furthermore, the FDD states that Buns On Fire has no liability for taxes levied upon the franchisee or the franchised business, except for taxes they are legally required to collect from the franchisee. This reinforces the franchisee's independent business status and responsibility for their own financial and legal obligations, including those related to employees.