Does the Buona franchise agreement establish a fiduciary relationship between the franchisor and franchisee?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
XIX. RELATIONSHIP OF THE PARTIES AND INDEMNIFICATION
- 19.1 Independent Contractor. This Agreement does not establish Franchisee as an agent, legal representative, joint venturer, partner, joint employer, employee or servant of Franchisor for any purpose whatsoever, and Franchisor shall not be construed to be jointly liable for any of Franchisee's or its employees' acts or omissions under any circumstances. Franchisee is solely responsible for the dayto-day operation of the Franchised Business. It is understood and agreed that Franchisee is an independent contractor and is in no way authorized to make any contract, agreement, warranty, or representation on behalf of Franchisor. The parties further agree that this Agreement does not create any fiduciary relationship between them. During the Term and any extension hereof, Franchisee agrees to take such action as Franchisor deems reasonably necessary for Franchisee to inform and hold itself out to the public, its employees and suppliers as an independent contractor operating the Franchised Business pursuant to a franchise from Franchisor. Franchisee shall prominently display, by posting of a sign within public view on or in the premises of the Franchised Business, and on any stationery, forms and promotional material a statement that clearly indicates that the Franchised Business is independently owned and operated by Franchisee as a franchisee of Franchisor.
- 19.2 No Employment Relationship**.** Franchisee expressly acknowledges that Franchisee is not Franchisee's employer or an employer of any of Franchisee's employees. In addition, Franchisor is not a joint employer with Franchisee. Franchisee acknowledges that Franchisor's training, guidance, advice and assistance, Franchisee's obligations under this Agreement and the standards, specifications, policies and procedures required by Franchisor hereunder and in the Manuals 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. The parties acknowledge and agree that Franchisee is solely responsible for the management of the Franchised Business as an independent franchise owner/operator.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 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 the franchisee is an independent contractor and is not authorized to make any contract, agreement, warranty, or representation on behalf of Buona.
This means that Buona franchisees should not expect the franchisor to act in their best interest as a fiduciary would be legally obligated to do. Instead, the relationship is defined as that of independent parties entering into a contractual agreement. Franchisees are responsible for the day-to-day operations of their franchised business and must inform the public, employees, and suppliers that they are independent contractors operating under a franchise from Buona.
Buona emphasizes that its training, guidance, and standards are designed to protect the brand's marks, confidential information, goodwill, and consistency, rather than to exert control over the franchisee's management of the business. The franchisee is solely responsible for managing the franchised business as an independent owner/operator. This is a common arrangement in franchising, where the franchisor sets standards and provides support, but the franchisee retains control over their individual business operations.